176 Building Societies 1965, No. 22

Transcription

1 176 Building Societies 1965, No. 22 Title 1. Short Title and commencement PART I PRELIMINARY 2. Interpretation 3. Registl'31' of Building Societies 4. Deputy Registrar of Building Societies 5. Official seal 6. Registers to be kept 7. Annual report by Registrar 8. Information as to societies. and inspection of documents kept by Registrars PART 11 ANALYSIS CONSTITUTION OF BUILDING SOCIETIES PurPoses and General Powers of Societies 9. Purpose for which building society may be established 10. Permanent and terminating societies 11. Power to raise and repay funds 12. Powers in relation to land Establishment and Incorporation of Societies 13. Mode of establishing society 14. Registration of rules of society 15. Incorporation of society 16. Appeal against refusal to register Rules of Society 17. Contents of rules 18. Effect of rules 19. Alteration of rules 20. Copies of rules to be supplied on request Name 0/ Society 21. Restriction on registration of names 22. Society to use registered name 23. Change of name Membership 24. Members who are not shareholders 25. Members under age of twentyone 26..Toint shareholders 27. Liability of members Commencement of Business 28. Business not to be commenced before incorporation 29. Minimum subscription by founding members 30. Commencement of advertising 31. Commencement of balloting foi appropria tions Union or Transfer of Enl(agements 32. Union of societies 33. Transfer of engagements 34. Supplementary provisions as to union and transfer of engagements PART III ADVANCES SPecial Advances on Mortgal(e 35. Meaning of "special advance" 36. Ordinary limitations on special advances 37. Permission to exceed limit for special advances 38. Permission to make special advance to purchaser of mortgaged property General Provl'sions as to Advances on Mortgage 39. Meaning of "member" for the purposes of this Part 40. Valuation of security 41. Additional security for advances 42. Record of advances 43. Security taken from third party

2 1965, No. 22 Building Societies 177 #. Arrangement for excess advance in connection with sale of property 45. Implied warranty on advance to purchaser, unless notice given to the contrary 46. Representation as to sufficiency of security 47. Restrictions on second mortgages 48. Advance for single premium life policy 49. Restriction on commissions for introduction of mortgage business 50. Provisions as to sale of mortgaged property A.dvances on Security 0/ Members' Shares 51. Limitation on advances on security of members' shares Supplementary Provisions 52. Power of Registrar to require actuary's certificate as to appropriations by ballot 53. Memorandum of discharge of mortgage PART IV INVESTMENT AND BANKING OF SURPLUS FUNDS 54. Interpretation 55. Investment and banking of surplus funds PART V BORROWING POWERS. INVESTORS AND DEPOSITORS 56. Borrowing powers 57. Restrictions on savings bank deposits 58. Interest on deposits 59. Liability for borrowing in excess of powers 60. Assistance to other building societies 61. New investors and depositors to receive copies of accounts 62. Depositor under age of twentyone 63. Designation of societies for investments by trustees PART VI POWERS OF CONTROL OF REGISTRAR 64. Power to order suspension of borrowing and subscriptions for shares 65. Procedure to 'be followed in making order 66. Provisions consequential on Registrar's order 67. Power to give directions as to advertising 68. Procedure to be followed in giving direction 69. Power to require documents and information 70. Special powers of direction in reia tion to small societies 71. Supplementary provisions as to small societies MRTVII MANAGEMENT AND ADMINISTRATION Registered Office 72. Registered office of society 73. Change of registered office Register 0/ Members 74. Duty to keep register 75. Right of member to obtain particulars Meetings and Resolutions 76. Annual general meeting 77. Length of notice of meetings 78. Persons entitled to notice of meetings 79. Proxies 80. Right to demand a poll 81. Special resolutions 82. Notices of special resolutions Directors and other Officers 83. Directors 84. Giving of security by officers of society 85. Duty of officers to account 86. Disclosure of interest by directors 87. Officers not to accept commissions in connection with advances 88. Notice of changes in holding of certain offices Office Management 89. Office management Accounts and Audit 90. Accounts 91. Revenue and appropriation account and balance sheet 92. Contents and form of accounts 93. Offences under sections 90 to Signing of balance sheet 95. Account and auditors' report to be annexed to balance sheet 96. Directors' report 97. Right to receive copies of accounts and reports 98. Appointment of auditors 99. Resolutions as to appointment and removal of auditors 100. Disqualifications for appointment as auditor

3 178 Building Societies 1965, No Auditors' report, right of access to books. and right to attend meetings 102. Accounts of groups in terminating society Annual Return 103. Duty to make annual return 104. Annual return to disclose advances to certain officers or companies 105. Additional annual return of certain transactions 106. Auditors' report on annual return Liability of Officers 107. Officers and auditors not to be exempted from liability Determination of DisPUtes 108. General provisions as to disputes 109. Determination of disputes by arbitration 110. Determination of disputes by Registrar 111. Determination of disputes by Court 112. Effect of determination 113. Statement of case for Supreme Court PART VIII DISSOLUTION AND WINDING Up 114. Dissolution in accordance with rules 115. Dissolution by consent 116. Provisions as to dissolution under last two preceding sections 117. Dissolution on award of Registrar 118. Dissolution by winding up by or under supervision of Court 119. Liability of mem'bers on dissolution or winding up 120. Notice of dissolution or winding up '121. Provision as to terminating societies PART IX MISCELLANEOUS PROVISIONS 122. General control of advertisements 123. Inspections and special meetings 124. Compulsory cancellation or suspension of registration 125. Cancellation of registration at request of society 126. Effect of cancellation or suspension of registration 127. Provisions as to shares held jointly 128. Land acquired by exercise of powers as mortgagee to be sold 129. Evidence of documents 130. Form in which records may be kept 131. Exemptions from stamp duties 132. Offences in relation to property of societies 133. False statements in documents 134. Summary jurisdiction in respect of indictable offences 135. Offences punishable on summary conviction 136. General penalty for offences 137. Regulations 138. Filing of rules of existing societies with District Registrars of Companies 139. Repeals, consequential amendments, and savings Schedules 1965, No. 22 An Act to consolidate and amend certain enactments of the General Assembly relating to building societies [17 September 1965 BE IT ENACTED by the General Assembly of New Zealand in Parliament assembled, and by the authority of the same, as follows: 1. Short Title and commencement-( 1) This Act may be cited as the Building Societies Act (2) This Act shall come into force on the first day of January, nineteen hundred and sixty-six.

4 1965, No. 22 Building Societies 179 PART I PRELIMINARY 2. Interprctation-( 1) In this Act, unless the context otherwise requires- "Additional security", in relation to an advance made by a society, means any security for the advance other than a mortgage of land, whether effected by the person to whom the advance is made or by any other person, and whether it is a legal or an equitable mortgage: "Advertisement", in relation to a society, means an advertisement in any medium inviting business or making known the society's activities; and includes in particular any circular, notice, or other document inviting business or making known the society's activities: "Alteration", in relation to the rules of a society, includes any addition to the rules, and also includes the rescission of all or any of the rules, with or without the substitution of one or more new rules for any rules rescinded: "Annual return" means the annual return required to be made by a society pursuant to section 103 of this Act: "Appropriate District Registrar of Companies", in relation to any society, means the District Registrar of Companies in whose office a copy of the society's registered rules is filed: "Basic advance", in relation to any advance made or to be made for the purpose of its being used in defraying the purchase price of land, means the maximum amount that the society would consider proper to advance on the security of that land if no other security were taken by the society: "Board of directors", in relation to a society managed by a committee of management, means that committee: "Building society", or "society", means a building society incorporated under this Act or under the Building Societies Act 1908: "Court" means a Magistrate's Court in any case where Magistrates' Courts have jurisdiction under the Magistrates' Courts Act 1947 in relation to this Act or to building societies; and in any other case means the Supreme Court or a Judge thereof:

5 180 Building Societies 1965, No. 22 "Director" includes a member of a committee of management of a society, and any other person occupying the position of director, by whatever name called: "Disposition", in relation to any land, means any disposition of that land inter vivos, and includes the grant of a lease or underlease; and "acquisition" has a corresponding meaning: "Excess advance", in relation to any advance, means the amount by which the advance exceeds the basic advance: "Financial year", in relation to any society, means the period in respect of which any revenue and appropriation account of the society laid before it at the annual general meeting is made up, whether that period is a year or not: "Land" has the same meaning as in the Property Law Act 1952; and includes a licensee's interest under any licence to occupy within the meaning of Part I of the Companies Amendment Act 1964: "Member", in relation to a society, indudes any person who for the time!being holds a share ( whether advanced or not) in the society: "Minister" means the Minister of Finance: "Officer'" in relation to a society, includes a director, manager, or secretary: "Permanent society" has the meaning assigned to it by section 10 of this Act: "Prescribed" means prescribed by regulations made under this Act: "Purchase price", in respect of any leasehold estate in land, means any sum payable as the consideration, or as part of the consideration, for the grant or assignment of the lease: "Registered valuer" means a valuer for the time being registered under the Valuers Act 1948: "Registrar" means the Registrar of Building Societies under this Act: "Rural fand" means any land other than urban land: "Share" includes stock: "Special advance" has the meaning assigned to it by section 35 of this Act: "Special resolution" has the meaning assigned to it by section 81 of this Act: "Terminating society" has the meaning assigned to it by section 10 of this Act; and, where a permanent society

6 1965, No. 22 Building Societies 181 in existence at the commencement of this Act had, on the first day of August, nineteen hundr~d and sixty-five, shareholders in tenninating groups, includes that part of the society's activities which relates to tenninating groups: "Urban land" means any land situated in a city, borough, town district, or county town. (2) For the purposes of any enactment in this Act which provides that an officer of a society who is in default shall be liable to imprisonment or to a fine, the expression "officer who is in default" means any officer of the society who knowingly and wilfully authorises or pennits the default, refusal, or contravention mentioned in the enactment. (3) For the purposes of this Act, the value of the assets of a society shall be the value at which the assets are taken into account in the latest balance sheet, and not any alternative values shown in that balance sheet: Provided that in the case of any land owned by the society the value shall not, for the purposes of this Act, exceed whichever is the greatest of the following amounts, namely: ( a) The value as shown in the valuation roll for the time being in force under the Valuation of Land Act 1951; or (b) The value as shown in a report made by a registered valuer; or (c) The purchase price paid by the society on the acquisition of the land, less depreciation, in respect of improvements, at the prescribed rate. (4) For the purposes of any reference in this Act to a person holding shares in a society up to a specified value (a) Any shares that are fully paid up shall be taken at their nominal value: (b) Any shares that are partly paid up shall be taken at the amount that has been paid up on them. (5) For the purposes of this Act, a person shall be taken to have a financial interest in the disposition of any land if, but only if, he would, on a disposition of that land, be entitled (whether directly or indirectly, and whether in possession or not) to the whole or part of the proceeds of the disposition. (6) Any reference in this Act to contravention of any provision of this Act, or of any regulations or directions thereunder, shall include a reference to failure to comply with that provision. Cf. 1908, No. 18, s. 2; 1925, No. 19, s. 3; 1955, No. 97, s. 3 (2); Building Societies Act 1962, ss. 1 (4), 129 (U.K.)

7 182 Building Societies 1965, No Registrar of Building Societies-For the purposes of this Act, there shall from time to time be appointed under the State Services Act 1962 a Registrar of Building Societies. Of. 1908, No. 18, s. 4; 1955, No. 97, s. 3 (1) 4. Deputy Registrar of Building Societies-( 1) There may also from time to time be appointed under the State Services Act 1962 a Deputy Registrar of Building Societies, who shall, under the control of the Registrar, perform such general official duties as he is called upon to perform by the Registrar. (2) On the occurrence from any cause of a vacancy in the office of Registrar (whether by reason of death, resignation, or otherwise), and in the case of the absence from duty of the Registrar (from whatever cause arising), and so long as any such vacancy or absence continues, the Deputy Registrar shall have and may exercise all the powers, duties, and functions of the Registrar. (3) The fact that the Deputy Registrar exercises any such power, duty, or function shall be conclusive evidence of his authority to do so, and no person shall be concerned to infjuire whether the occasion has arisen requiring or authorising him to do so. Cf. 1908, No. 18, s. 4A; 1955, No. 97, s. 4; Building Societies Act 1962, s. 119 (U.K.) 5. Official seal-there shall be an official seal ID the custody of the Registrar. Cf. 1908, No. 18, s. 4c; 1955, No. 97, s Registers to be kept-the Registrar shall cause to be kept in his office a register of building societies and such other registers as he considers necessary for the purposes of this Act, in which shall be recorded all matters required by this Act or by regulations made under this Act to be recorded hy the Registrar. Cf. 1908, No. 18, s. 4n; 1955, No. 97, s Annual report by Registrar-( 1) The Registrar shall every year make to the Minister a report of his proceedings during the preceding year. There shall be included in the lcport an abstract and report of the annual returns of societies for the preceding year. (2) A copy of the report shall be laid before Parliament within twenty-eight days after its receipt by the Minister if

8 1965, No. 22 Building Societies 183 Parliament is then in session, and, jj not, then within twenty~ eight days after the commencement of the next. ensuing session. Cf. Building Societies Act 1962, s. 118 (U.K.) 8. Infonnation as to societies, and inspection of documents kept by Registrars-( 1) Any person shall be entitled, on application to the Registrar and on payment of the prescribed fee (if any), to be informed of the names and addresses of any building societies together with the addresses of the District Registrars of Companies at whose offices copies of the rules, accounts, and annual returns of the societies are filed pursuan t to this Act. (2) Subject to subsection (4) of section 105 of this Act, any person may, on payment to the appropriate District Registrar of Companies of the fee (if any) for the time being prescribed in the First Schedule to the Companies Act 1955 in respect of the inspection of documents relating to companies, inspect the documents filed in the office of that District Registrar pursuant to this Act. (3) Subject to subsection (4) of section 105 of this Act, any person may, on payment to the appropriate District Registrar of Companies of the fee (if any) for the time being prescribed in the First Schedule to the Companies Act 1955 in respect of certificates of incorporation of companies or in respect of copies of or extracts from other documents or parts thereof, require a certificate of the incorporation of any society, or a copy of or extract from any other document filed in his office pursuant to this Act, to be given or certified by that Registrar or an Assistant Registrar of Companies under his hand and seal. (4) No process for compelling the production of any document kept by any District Registrar of Companies shall issue from any Court except with the leave of that Court, and any such process if issued shall bear on it a statement that it is issued with the leave of the Court. Cf. 1908, No. 18, s. 17 PART II CONSTITUTION OF BUILDING SOCIETIES Purposes and General Powers of Societies 9. Purpose for which building society may be established The purpose for which a building society may be established unlder this Act is that of raising, by the subscriptions of

9 184 Building Societies 1965, No. 22 members, a fund for making advances to members out of the' funds of the society on security by way of mortgage of land, or on the security of the shares of members, in accordance with this Act. Cf. 1908, No. 18, s. 7; Building Societies Act 1962, s. 1 (1) (U.K.) 10. Permanent and terminating societies-a building society established under this Act may be either- (a) A permanent society, that is to say, a society which has not by its rules any fixed date at which, or specified result on the attainment of which, it is to terminate; or (b) A terminating society, that is to say, a society which by its rules is to terminate at a fixed date, or when a result specified in its rules is attained. Cf. 1908, No. 18, ss. 2 (1), 7; Building Societies Act 1962, s. 1 (2) (U.K.) 11. Power to raise and repay funds-( 1) A society may from time to time raise funds by the issue of shares of one or more denominations, either as shares paid up in full or as shares to be paid by periodical or other subscriptions, and with or without accumulating interest. (2) The society may repay any funds so raised when they are no longer required for the purposes of the society: Provided that whenever the society proposes to repay any such funds it shall not do so until provision has been made by it to meet applications that have then been duly made by depositors for the repayment of money deposited by them with the society. Cf. 1908, No. 18, s. 8; Building Societies Act 1962, s. 6 (U.K.) 12. Powers in relation to land-( 1 ) Any society shall, so far as is necessary for the purpose for which it is established, have power to hold land. (2) Any society may purchase, build, hire, or take on lease any building or part of a building for conducting its business, and may adapt and furnish it. (3) Any society may purchase or hold on lease any land for the purpose only of erecting thereon a building for conducting the business of the society. ( 4) Subject to the foregoing provisions of this section, for the purpose of acquiring any licence to occupy within the meaning of Part I of the Companies Amendment Act 1964

10 1965, No. 22 Building Societies 185 any society may subscribe for or purchase or otherwise acquire shares in any company by which the licence has been or is to be issued. (5) Any society may sell, exchange, or let the whole or any part of any such building or land as is mentioned in subsection (2) or subsection (3) of this section. Cf. 1908, No. 18, ss. 8, 41; Building Societies Act 1962, s. 7 (U.K.) Establishment and Incorporation of Societies 13. Mode of establishing society-any twenty or more persons may establish a society under this Act by- (a) Agreeing upon rules for the government of the society, being rules that conform to the requirements of this Act relating to rules of building societies; and (b) Sending to the Registrar four printed copies of those rules, signed by not less than twenty of those persons and by the intended secretary or other officer. Cf. 1908, No. 18, ss. 7, 13; 1955, No. 97, s. 5 (a); Building Societies Act 1962, s. 1 (3) (U.K.) 14. Registration of rules of society-( 1) Where copies of rules have been sent to the Registrar in accordance with section 13 of this Act he may, if he thinks fit, refer a copy to the Solicitor-General for the purpose of ensuring that the rules conform to the requirements of this Act relating to rules of building societies. If the Solicitor-General is of opinion that the rules do not so conform he may notify the intended secretary or other officer of the society of the matters in respect of which, in his opinion, they do not conform. (2) When the Registrar is satisfied that the rules conform to such requirements as aforesaid, he shall, subject to section 21 of this Act, retain and register two copies and return one copy to the secretary or other officer of the society, together with a certificate of incorporation. (3) On the registration of the rules as aforesaid the Registrar shall certify under his hand and seal on the remaining copy that the rules are registered, and send that copy, together with a copy of the certificate of incorporation, to the District Registrar of Companies whose office is nearest to the registered office of the society, or to such other District Registrar of Companies as may be approved for the purpose after consultation with the society. Cf. 1908, No. 18, ss. 5,14; 1955, No. 97, ss. 2 (3),5 (b); Building Societies Act 1962, s. 2 (1) (U.K.)

11 186 Building Societies 1965, No Incorporation of society-( 1) From the date of incorporation mentioned in such certificate of incorporation as aforesaid, the society shall become a body corporate, by the name contained in the rules so registered, having perpetual succession and a common seal. ( 2) The common seal of the society shall bear the registered name of the society. Cf. 1908, No. 18, s. 6; Building Societies Act 1962, s. 3 (U.K.) 16. Appeal against refusal to register-if the Registrar refuses to register the rules, the society may submit the rules to a Judge of the Supreme Court, together with a statement in writing of the reasons assigned by the Registrar for his refusal, whereupon the Judge may, if he thinks fit, direct the Registrar to register the rules. Cf. 1908, No. 18,s. 15 Rules of Society 17. Contents of rules-( 1) The rules of every society shall set out- (a) The name of the society and the address of its registered office: (b) The manner in which the funds of the society are to be raised: ( c) The classes of shares to be issued, the terms on which they are to be issued, the terms (if any) on which they may be withdrawn or surrendered, and the manner in which payments for shares are to be made and contributions are to be paid to the society by the members: ( d) In the case of a terminating society, the date on which, or the result on the attainment of which, the society is to terminate; or, where the terminating society is one in which groups of shares are to terminate at the end of given periods or on the attainment of specified results, that period or result in respect of any group, and the manner in which, on the termination of any group, the residual assets or liabilities are to be dealt with by the society: ( e) Whether preferential shares are to be issued and, if so, within what limits: (f) The purposes to which the funds of the society are to be applied:

12 1965, No. 22 Building Societies 187 (g) The manner in which advances are to be made and repaid, and the terms and conditions on which a borrower can redeem the amount due from him before the end of the period for which the advance was made: (h) The manner in which any ballots, tenders, or auctions for advances are to be conducted, and the terms and conditions upon and subject to which rights to take up such advances may be exercised or surrendered: ( i) The manner in which losses are to be ascertained and provided for: (j) Whether the society intends to borrow money and, if so, within what limits, not exceeding those prescribed by this Act: (k) In the case of a society authorised under this Act to accept savings bank deposits, the terms and conditions, not inconsistent with this Act, on which such deposits are to be received by the society and withdrawn by depositors: (I) The manner in which membership is to cease: (m) The manner of remunerating auditors, and the manner of appointing, remunerating, and removing the board of directors and other officers: (n) The powers and duties of the board of directors and of other officers: ( 0) Provision for the custody of the mortgage instruments and other securities belonging to the society: (p) Whether disputes between the society and any of its members, or any person claiming by or through a member, or under the rules, are (subject to the provisions of this Act) to be settled by reference to the Court, or to the Registrar, or to arbitration: (q) The fines and forfeitures to be imposed on members of the society, and the manner of their disposal in the society's accounts: (r) Provision for the device, custody, and use of the society's common seal: (s) The manner in which the society (whether permanent or terminating) may be terminated or dissolved. (2) The rules of every society shall also provide for the calling and holding of meetings, and in particular for- (a) The right of members to requisition meetings: (b) The manner in which notice of any resolutions to be moved at meetings is to be given to members:

13 188 Building Societies 1965, No. 22 (c) The procedure to be observed at meetings: ( d) The form of notice for the convening of a meeting, and the manner of its service: ( e) The voting rights of members, the right to demand a poll, and the manner in which a poll is to be taken. (3) In the case of a society incorporated after the commencement of this Act, the rules shall also include provision authorising the issue of paid up shares in accordance with subsection (1) of section 29 of this Act. ( 4) The rules of any society may describe in a schedule thereto the forms of mortgage, transfer, agreement, bond, security for deposit or loan, or other instrument necessary for carrying its purposes into execution. (5) No permanent society may in its rules provide for the issue of shares in terminating groups or for the issue of shares giving the right to appropriation by way of ballot, tender, or auction: Provided that where the rules of a permanent society in force on the first day of August, nineteen hundred and sixtyfive, provided for the issue of shares in terminating groups and the society had shareholders in such groups on that date, the rules may continue to provide for the operation of terminating groups. (6) Every building society that was incorporated before the commencement of this Act shall, not later than the thirtyfirst day of December, nineteen hundred and sixty-six, make such alterations in its rules as may be required for compliance with subsections (1) and (2) of this section. Notwithstanding anything in subsection (1) or subsection (7) of section 19 of this Act, an alteration for the purposes of this subsection need not be by special resolution, so long as it is made in accordance with the society's rules; but in all other respects the said section 19 shall apply to an alteration so made as if it had been made by special resolution. (7) If and so far as a society has not provided in its rules for any matter specified in subsection (2) of this section on or before the thirty-first day of December, nineteen hundred and sixty-six,- ( a) The provisions of the First Schedule to this Act shall have effect, in respect of any meeting held after that date, as if they formed part of the society's rules; and where a society has, before or after the commencement of this Act, provided in its rules for the matter in question it may also by its rules expressly exclude the relevant provisions of that Schedule; and

14 1965, No. 22 Building Societies 189 (b) The society, and every officer of the society who is in default, shall be guilty of an offence and shall be liable to a fine not exceeding ten pounds for every day during which the offence has continued. (8) The foregoing provisions of this section shall have effect without prejudice to the provisions of this Act relating to rules that are void as therein mentioned. Cf. 1908, No. 18, ss. 11, 21; Building Societies Act 1962, ss. 4, 130, Eighth Schedule (para. 3) (U.K.) 18. Effect of rules-the rules of a society shall be binding on every member and officer of the society, and on all persons claiming on account of any member or under the rules; and all such members, officers, and persons shall be deemed to have full notice of the rules. Cf. 1908, No. 18, s. 23; Building Societies Act 1962, s. 5 (U.K.) 19. Al'teration of rules-( 1) Any society may alter its rules by special resolution. (2) Where a society alters its rules by special resolution, it shall send to the Registrar, within fourteen days after the passing of the special resolution, four printed copies of the alteration, or, in the case of the rescission of a rule, four copies of the resolution, signed by three members and the secretary, and a statutory declaration of an officer of the society that the resolution has been passed as a special resolution. (3) Where copies are so sent to the Registrar, he may, if he thinks fit, refer a copy to the Solicitor-General for the purpose of ensuring that the alteration is in conformity with this Act; and the Solicitor-General shall have the same functions as he has in relation to original rules. (4) When the Registrar is satisfied that the alteration is in conformity with this Act, he shall return one copy to the secretary or other officer of the society with a certificate of registration, and shall retain and register two copies; and on such registration the alteration shall take effect. (5) On the registration of such copies the Registrar shall certify under his hand and seal, on the remaining copy, that the alteration is registered, and send that copy to the appropriate District Registrar of Companies. (6) If the Registrar refuses to register the alteration, the society shall have the same right of appeal to a Judge of the

15 190 Building Societies 1965, No. 22 Supreme Court as it would have against a refusal to register rules, and the provisions of section 16 of this Act shall apply accordingly. (7) Any provision in the rules of a society that the rules may be altered without passing a special resolution shall be void. (8) If any society fails to comply with subsection (2) of this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. 1908, No. 18, ss. 18, 19, 20; 1955, No. 97, ss. 2 (3), 5 (c), (d); Building Societies Act 1962, s. 17 (U.K.) 20. Copies of rules to he supplied on request-( 1) On the request of any person, a society shall supply to that person a complete printed copy of its rules with a copy of the society's certificate of incorporation annexed to it. (2) The society shall be entitled to charge a sum not exceeding five shillings for every such copy of its rules. (3) If any society fails to comply with the requirements of subsection (1) of this section, the society, and every officer of the society who is in default, shall be guilty of an offence and shall be liable to a fine not exceeding fifty pounds. Cf. 1908, No. 18, s. 17; Building Societies Act 1962, s. 107 (U.K.) Name of Society 21. Restriction on registration of names-( 1) No society shall hereafter be registered under this Act in a name that- (a) Is identical with that of any other building society, or of a company carrying on business in New Zealand (whether registered in New Zealand or not), or of any other body corporate established or registered in New Zealand under any Act, or so nearly resembles that name as to be calculated to deceive, except where that other society or company or body corporate, as the case may be, signifies its consent in such manner as the Registrar requires, and the Registrar is satisfied that registration of the society in the proposed name will not be contrary to the public interest; or (b) Contains the word "Bank", "Bankers", or "Banking". ( 2) No society shall be registered under this Act in a name that in the opinion of the Registrar is undesirable.

16 1965, No. 22 Building Societies 191 (3) Except as provided in subsection (1) of this section, nothing in this section shall limit or affect the provisions of any enactment, other than this Act, relating to restrictions on the use of any name. Cf. 1908, No. 18, s. 16; 1951, No. 37; Building Societies Act 1962, s. 2 (2) (U.K.) 22. Society to use registered name-( 1) A society shall not use any name or title other than its registered name: Provided that the Registrar may from time to time, by writing, authorise any society to use for any specified purpose or purposes any abbreviation of that name approved by him in that behalf. (2) If any society contravenes the provisions of subsection (1) of this section, the society, and every director of the society who is a party to the contravention, shall be guilty of an offence and shall be liable to a fine not exceeding ten pounds and, if the offence is a continuing one, to a further fine not exceeding ten pounds for every day during which the offence has continued. Cf. Building Societies Act 1962, s. 15 (U.K.) 23. Change of name-( 1) Subject to the provisions of this Act, a society may change its name by special resolution. (2) If, through inadvertence or otherwise, a society at its first registration under this Act or on its registration in a new name is registered in a name which is in contravention of section 21 of this Act, or of any enactment, other than this Act, relating to restrictions on the use of any name, the society shall, within a period of six weeks from the date of its being required by the Registrar to do so, or within such further period as he may allow, change its name by resolution to a name that is not in contravention as aforesaid. (3) The society shall give notice in writing of any such change to the Registrar within fourteen days after the passing of the special resolution or resolution, as the case may be. ( 4) On receipt of the notice the Registrar shall, unless in his opinion the new name is undesirable, register the new name and send to the society a certificate of such registration. (5) On the issue of a certificate of registration the Registrar shall send a copy of the certificate to the appropriate District Registrar of Companies. (6) Any such change of name shall not affect the rights and obligations of the society or of any of its members or of any other person concerned.

17 192 Building Societies 1965, No. 22 (7) If a society fails to send to the Registrar a notice of any change of name within the time prescribed or allowed by this section the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. C. 1908, No. 18, s. 24; Building Societies Act 1962, s. 16 (U.K.) Membership 24. Members who are not shareholders-( 1) The rules of a society may allow a person to become a member without holding a share in the society. (2) Such of the rules as relate to the making of advances to members need not be expressed in terms that treat a member to whom an advance is made as being, by reason of the making of the advance, the holder of a share in the society. Cf. Building Societies Act 1962, s. 8 (U.K.) 25. Members under age of twenty-one-any person under the age of twenty-one years may, if the rules do not otherwise provide, be admitted as a member of a building society, and can give all necessary receipts; but while he is under that age he cannot hold any office in the society. Cf. 1908, No. 18, s. 42; Building Societies Act 1962, s.9 (U.K.) 26. Joint shareholders-( 1) Two or more persons may jointly hold shares in any society. (2) The provisions of section 127 of this Act apply to any shares so held. Cf. 1908, No. 18, s. 43; Building Societies Act 1962, s. 10 (U.K.) 27. Liability of members-( 1) The liability of a member of a society in respect of any share on which no advance has been made shall be limited to the amount actually paid or in arrear on the share. (2) The liability of a member in respect of any share on which an advance has been made shall be limited to the amount payable thereon under any mortgage or other security or under the rules of the society. (3) The liability of a member to whom an advance is made under rules made in accordance with section 24 of this Act

18 1965, No. 22 Building Societies 193 shall not be greater than it would be if the rules treated him as being, by reason of the making of the advance, the holder of a share in the society. Cf. 1908, No. 18, s. 9; Building Societies Act 1962, s. 11 (U.K.) Commencement of Business 28. Business not to be commenced before incorporation (1) No society, and no persons representing themselves to be a society, shall commence business without first obtaining a certificate of incorporation under this Act. (2) Every society or person who acts in contravention of this section commits an offence and is liable, on information laid by the Registrar, to a fine not exceeding five pounds for every day during which business has been carried on without a certificate of incorporation having been obtained. Cf. 1908, No. 18, s. 49; Building Societies Act 1962, s. 12 (1) (U.K.) 29. Minimum subscription by founding members-(1) A society incorporated after the commencement of this Act shall not commence any business or borrow any money unless there has been produced to the Registrar evidence satisfying him that twenty of the members who signed copies of the rules for sending to the Registrar under section 13 of this Act- (a) Have each been issued with shares in the society to the value of two hundred and fifty pounds on terms that conform to the requirements of the Second Scheduie to this Act; and (b) Have each paid to the society in cash for those shares a sum of two hundred and fifty poundsand the Registrar has issued to the society his certificate that the requisite evidence has been so produced. (2) If at the end of the period of two months beginning with the date on which the society became a body corporate the requisite evidence has not been produced to the Registrar under subsection (1) of this section, the Registrar may if he thinks fit cancel the registration of the society, and the society shall cease to enjoy the privileges of a society under this Act. (3) Notice of the cancellation of registration of a society under subsection (2) of this section shall be published by the Registrar in the Gazette, and in such other ways as appear to him to be expedient for informing the public, and shall also be sent by him to the appropriate District Registrar of Companies. AS

19 194 Building Societies 1965, No. 22 ( 4) The provisions of the Second Schedule to this Act shall have effect in respect of shares issued in confonnity with subsection (1) of this section, for the purpose of ensuring that the conditions attaching to the shares are dbserved until the end of the period of five years beginning with the date on which the Registrar issued his certificate to the society under that subsection. ( 5) If any society commences business or borrows any money in contravention of this section, the society shall be guilty of an offence and shah be liable on conviction on indictment to a fine not exceeding five hundred pounds; and every officer of the society who is in default shall be guilty of an offence and shall be liable on conviction on indictment to imprisonment for a term not exceeding two years or to a fine not exceeding five hundred pounds, or to both. Cf. Building Societies Act 1962, s. 13 (U.K.) 30. Commencement of advertising-( 1) A society incorporated after the commencement of this Act shall not issue or cause to be issued any advertisement until, on an application in writing made to the Registrar in accordance with this section, the Registrar has given to the society pennission in writing to commence advertising. (2) No application for pennission under this section may be made at any time before the society has, in accordance with the provisions of this Act, sent to the Registrar its annual return (with the auditor's report annexed) for its first complete financial year of twelve months, and a copy of the corresponding balance sheet, including every document required by law to be annexed or attached thereto. (3) On an application by a society under this section the Registrar shall grant permission if all the requirements set out in the Third Schedule to this Act are fulfilled in relation to the society. ( 4) If any society acts in contravention of subsection (1) of this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this section; and if, after any person has been convicted of an offence against this section in respect of an advertisement which is on display in any public place, the society does not take all practicable steps to have the advertisement removed, the society, and every officer of the society who is in default, shall be guilty of a further offence against this section. (5) If any society is guilty of an offence against this section, the society shall be liable on conviction on indictment to a fine not exceeding five hundred pounds; and if an officer

20 1965, No. 22 Building Societies 195 of a building society is guilty of an offence against this section he shall be liable on conviction on indictment to imprisonment for a term not exceeding two years or to a fine not exceeding five hundred pounds, or to both. Cf. Building Societies Act 1962, s. 14 (U.K.) 31. o.mmencement of balloting for appropriations ( 1) A terminating society whose rules provide for shareholders to receive appropriations by ballot shall not commence balloting unless there has been produced to the Registrar a certificate from an actuary, approved for the purposes of this section by the Minister, certifying that every member of the society, if his share or shares are properly paid up in accordance with the rules, has a reasonable prospect of receiving appropriations within not more than thirty years from the date of the formation of the group of which he is a member. (2) If a society contravenes the provisions of this section, the Registrar may present a petition for the winding up of the society under the Companies Act Cf. 1933, No. 41, s. 52 (1); Building Societies Act 1962, s.35 (U.K.) Union or Transfer of Engagements 32. Union of societies-( 1) Two or more building societies may unite and become one society, with or without a dissolution or division of the funds of anyone or more of those societies, if- (a) The terms of the union are approved by a speciaj resolution of each of the societies; and (b) The holders of not less than two-thirds of the whole number of shares in each society, whether they are present at the meeting at which the resolution is passed or not, consent in writing to the union, or the union is confirmed under subsection (3) of section 34 of this Act. (2) Notice of every union of societies shall be sent to the Registrar. (3) If any society fails to send notice to the Registrar under subsection (2) of this section the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. 1908, No. 18, s. 34; Building Societies Act 1962, s. 18 (U.K.) A8*

21 196 Building Societies 1965, No Transfer of engagements-( 1) Subject to the provisions of this section, a society may by special resolution transfer its engagements to another society which undertakes to fulfil those engagements; and a society may- ( a) By special resolution; or (b) With the consent of the Registrar, by resolution of a general meeting or of the board of directorsundertake to fulfil the engagements of another society. (2) It shall be the duty of a society transferring its engagements under this section to send notice of the transfer to the Registrar. (3) A transfer of engagements between societies under this section shall not have effect unless- (a) The holders of not less than two-thirds of the whole number of shares of each of the societies have consented in writing to the transfer, or the transfer has been confirmed under subsection (3) of section 34 of this Act; and (b) Notice of the transfer has been registered. ( 4) If a society fails to comply with subsection (2) of this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. 1908, No. 18, s. 34; Building Societies Act 1962, s. 19 (U.K.) 34. Supplementary provisions as to union and transfer of engagements-( 1) A society (in this section referred to as the relevant society) desiring to unite with one or more other societies, or to transfer its engagements to another society, or to undertake to fulfil the engagements of another society, shall, unless the Registrar has by notice in writing exempted it from the requirements of this subsection, send to each of its members, at his address as recorded in the register of members, a statement, the contents of which have been approved by the Registrar, setting out- (a) The financial position of the relevant society and that of the other society or societies concerned: (b) The interest of the directors of the relevant society in the union or transfer: (c) The compensation or other consideration proposed to be paid to the directors or other officers of the relevant society, and of the other society or societies concerned:

22 1965, No. 22 Building Societies 197 (d) The payments (if any) to be made to the members of the relevant society, and of the other society or societies concerned, in consideration of the union or transfer of engagements. (2) A statement under subsection (1) of this section shall be sent so that it will be received by- (a) Any member to whom the relevant society sends a notice of any resolution, to be moved at a meeting of the relevant society, for the union or transfer to which the statement relates; and (b) Any member to whom the relevant society applies to obtain his consent to the union or transfernot later than he receives that notice or that application. (3) The relevant society may apply to the Registrar to confirm the union or transfer, notwithstanding that the consent in writing of the holders of two-thirds of the whole number of shares of the relevant society has not been obtained. Where such an application is made,- (a) The relevant society shall publish notice of the application in the Gazette and, if the Registrar so requires, in one or more newspapers nominated by him; and (b) The Registrar, after hearing the relevant society and such other persons as he considers entitled to be heard, may confirm the union or transfer. ( 4) Where notice of the union or transfer is sent to the Registrar under section 32 or section 33 of this Act the Registrar shall, if he is satisfied that the provisions of those sections and of this section have been complied with, register the notice and give notice thereof to the appropriate District Registrars of Companies. (5) The registration by the Registrar of notice of the union or transfer shall operate, by virtue of this subsection and without further assurance, as an effectual transfer and assignment, as at the date of the registration, to the united society or, as the case may be, to the society to which the engagements are transferred, of the funds, property, and assets of the relevant society, or, as the case may be, of such part of those funds, property, and assets as are provided for by the instrument of union or transfer. ( 6) Where by virtue of subsection (5) of this section any land or interest in land becomes vested in the united society or, as the case may require, the society to which the engagements are transferred the District Land Registrar, on the request of the said society and on payment of the appropriate fee, and on being satisfied, by statutory declaration or otherwise, of the title of the said society, shall make such entries

23 \198 Building Societies 1~65, No. 22 in his register and on any outstanding documents of title and generally do such things as may be necessary to give effect. to the said subsection (5). (7) The union or transfer of engagements shall not affect the rights of any creditor of the relevant society. (8) A failure to comply with any of the provisions of subsections (1) and (2) of this section shall not invalidate the union or transfer of engagements; but if the relevant society fails to comply with any of those provisions the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. 1908, No. 18, s. 34; Building Societies Act 1962, ss. 18 (2),20 (U.K.) PART III ADVANCES Special Advances on Mortgage 35. Meaning of "special advance"-( 1) In this Act, the expression "special advance" means an advance made by a society by way of mortgage on the security of land, being (a) An advance of any amount to a body corporate; or (b) An advance of a sum exceeding ten thousand pounds to a person other than a body corporate, on the security of a mortgage over urban land; or ( c) An advance of a sum exceeding twelve thousand five hundred pounds to a person other than a body corporate, on the security of a mortgage over rural land; or (d) An advance of any amount to a person other than a body corporate, being a person who is, after the advance is made to him, indebted to the society (taking into account the advance in question and all other debts of any description, whether immediately repayable or not) in an amount exceeding, where the advance is in respect of urban land, ten thousand pounds or, where the advance is in respect of rural land, twelve thousand five hundred pounds. (2) For the purposes of paragraph (d) of subsection (1) of this section, the amount by which a person is indebted to the society shall be ascertained both- (a) Immediately after the making of the advance; and

24 1965, No. 22 Building Societies 199 (b) At the end of the period of three months beginning with the date of the advance or at the end of the financial year in which the advance was made, whichever is the sooner. (3) For the purposes of paragraph (d) of subsection (1) of this section, a person to whom an advance is made by a society shall be taken to be indebted to the society in an amount exceeding the appropriate limit prescribed by that paragraph if either- ( a) The amount of his indebtedness to the society, ascertained immediately after the making of the advance, exceeds twice the amount of the appropriate limit prescribed by that paragraph; or (b) The amount of his indebtedness to the society, ascertained at the end of the period of three months beginning with the date of the advance or at the end of the financial year in which the advance was made (whichever is the sooner) exceeds the amount of the appropriate limit prescribed by that paragraph. (4) For the purposes of this section and of sections 36 to 38 of this Act- ( a) The renewal by a society of any mortgage shall be treated as an advance made by the society of the amount for which the mortgage is renewed if, but only if, that amount exceeds by more than one hundred pounds the amount of the mortgage debt remaining unpaid immediately before the renewal: (b) Where the mortgagor of any land mortgaged to a society to secure an advance made by the society transfers to another person, subject to the mortgage, his interest in the land, the transaction shall be treated as an advance made by the society to that other person of an amount equal to the amount of the mortgage debt remaining unpaid immediately after the transfer, together with any arrears of interest then outstanding: ( c) An advance made jointly to two or more persons shall be taken to be a special advance if an advance of the like amount made under the like conditions to anyone of those persons would be a special advance within the meaning of the foregoing provisions of this section. Cf. Building Societies Act 1962, s. 21 (1)-(3), (7). (8) (U.K.)

25 200 Building Societies 1965) No Ordinary limitations on special advances-( 1) Every society shall so conduct its business as to ensure that the total amount of special advances made by it during any period of two consecutive financial years does not exceed twenty per cent of the total amount of all advances made by it by way of mortgage on the security of land during that period. (2) Notwithstanding anything in subsection (1) of this section, where the total amount of special advances made by any terminating society during any period of two consecutive financial years exceeds the limit specified in that subsection, the Registrar, if satisfied- (a) That the making of such advances in excess of that limit was necessary by reason of appropriations (by way of ballot, tender, or auction) received during that period by members who held shares in the society on the first day of August, nineteen hundred and sixty-five; and (b) That the society could not reasonably have foreseen that such limit would be so exceededshall in writing exempt the society from the requirements of the said subsection (1) in respect of that period. Where any such exemption is granted the amount of the excess shall be taken into account in reduction of the total amount of special advances that may be made by the society under subsection (1) of this section during the period of two consecutive financial years following the period in which the said limit was exceeded. (3) Notwithstanding anything in subsection (1) of this section, where before the first day of August, nineteen hundred and sixty-five, a society has issued to bodies corporate any shares in terminating groups, the Registrar, if satisfied that compliance by the society with the requirements of subsection (1) of this section and, where applicable, section 37 of this Act would prevent the society from fulfilling its dbligations to the holders of such shares, may, for the purpose of enabling the society to fulfil those obligations, grant to the society permission in writing to make special advances in excess of the limit specified in the said subsection (1), and of any limit imposed under the said section 37, during such period as he may specify in the permission. Any such permission may be granted upon and subject to such terms and conditions as the Registrar thinks fit. (4) If a society does not comply with the requirements of this section, or of any terms or conditions of any permission granted under this section, the society, and every officer of

26 1965, No. 22 Building Societies 201 the society who is in default, shall be guilty of an offence against this Act. (5) Without prejudice to subsection (4) of this section, if a society does not comply with the requirements of this section, or of any terms or conditions of any permission granted under this section, the Registrar may present a petition for the winding up of the society under the Companies Act Cf. Building Societies Act 1962, s. 22 (1), (7), (8) (U.K.) 37. Permission to exceed limit for special advances ( 1) This section shall apply in any case where a society makes or proposes to make special advances on the security of land consisting wholly or mainly of- (a) Dwellinghouses or fiats in respect of which the Registrar is satisfied, on an application made to him by the society, that they are being or will be made available for renting by tenants; or (b) Halls which are or will be owned by dubs, or by religious bodies, congregations, or societies ( other than building societies), or by bodies of persons associated for social welfare or community purposes, and in respect of which the Registrar is satisfied, on an application made to him by the building society, that they are or will be made available for use or hire as community centres or public halls or for recreation or other leisure-time occupation by members of the public or for social gatheringsbeing dwellinghouses, fiats, or halls which it is proposed to construct or which are in the course of construction or have in the opinion of the Registrar been recently constructed. (2) For the purpose of authorising the society to exceed, in respect of any period of two consecutive financial years, the limit specified in section 36 of this Act by an amount equal to the whole or some proportion of the amount of the advances in respect of which the application is made, the Registrar may if he thinks fit grant to the society permission in writing to make special advances in that period in excess of that limit, but subject to such other limit as may be specified in the permission for that purpose. (3) The limit specified in any permission granted under this section in relation to any such period may be expressed as a percentage of the total advances made by the society in that period, or in any other manner.

27 202 Building Societies 1965, No. 22 ( 4) Where permission is granted under this section, the provisions of seotion 36 of this Act shall have effect subject to the terms of the permission. Cf. Building Societies Act 1962, s. 23 (U.K.) 38. Permission to make special advance to purchaser of mortgaged property-( 1) This section shall apply where a society, in the exercise of its powers as mortgagee, proposes to sell any land mortgaged to the society, and to make to the purchaser an advance on the security of the land that will constitute a special advance. (2) If, on an application to the Registrar, the society shows to his satisfaction- ( a) That the person entitled to redeem the mortgage is a body corporate, or a person who is indebted to the society (taking into account the advance secured by the mortgage and all other debts of any description, whether immediately repayable or not) in an amount exceeding, where the advance was in respect of urban land, ten thousand pounds or, where the advance was in respect of rural land, twelve thousand five hundred pounds; and (b) That the amount of the mortgage debt which, at the time of the application, has not been repaid to the society, together with any arrears of interest in respect of the advance secured by the mortgage, exceeds the amount of the advance that the society proposes to make to the purchaser of the landthe Registrar may, if he thinks fit, grant to the society permission in writing to make the special advance to which the application relates. (3) Any special advance for which permission is granted under this section shall be left out of account for the purposes of section 36 of this Act. Cf. Building Societies Act 1962, s. 24 (U.K.) General Provisions as to Advances on Mortgage 39. Meaning of "member" for the purposes of this Part References in this Pa'rt of this Act to a member of a society ( a) Include references to a person who has succeeded to any of the rights or liabilities of a member of the society; and

28 1965, No. 22 Building Societies 203 (b) In relation to anythirig done or to be done before the making of an advance, include references to a person who is a member of the society when the advance is made. Cf. Building Societies Act 1962, s. 26 (6) (U.K.) 40. Valuation of security-( 1) It shall be the duty of every director of a society to satisfy himself that the arrangements made for assessing the adequacy of the security to be taken in respect of advances to be made by the society by way of mortgage on the security of land are such as may reasonably be expected to ensure that- (a) The adequacy of any security to be so taken will be assessed either by the directors of the society or by a director or other officer of the society who is competent to make the assessment and who has not prepared the report referred to in paragraph (b) of this subsection; and (b) There will be made available to every person who has to assess the adequacy of any security to be so taken an appropriate report on the value of any land comprised in the security and on any matter likely to affect that value. (2) In paragraph (b) of subsection (1) of this section the expression "appropriate report" means a written report prepared and signed- (a) In the case of an application to the society for an advance of a sum exceeding ten thousand pounds in respect of urban land or twelve thousand five hundred pounds in respect of rural land, by a registered valuer who is not disqualified by virtue of this section for reporting on that land; and (b) In any other case, by a competent and prudent person who is experienced in the matters relevant to the determination of the value of the land and is not disqualified by virtue of this section for reporting on that land. (3) For the purposes of paragraphs (a) and (b) of subsection (2) of this section, the following persons shall be disqualified for reporting on any land comprised in security proposed to be taken by the society for an advance: ( a) A person to whom the society has made or undertaken to make any payment for introducing to the society the applicant for that advance:

29 204 Building Societies 1965, No. 22 (b) Where the application for the advance is made following a disposition of the land, any person having a financial interest in that disposition, and any person receiving a commission or gift for introducing the parties to the transaction involving that disposition. (4) A director of a society who fails to carry out his duty under subsection ( 1 ) of this section, and any person who prepares a report on any land in respect of which he is disqualified by virtue of this section for reporting thereon, knowing or having reason to believe that the report will be used or is likely to be used for the purposes of that subsection, commits an offence and shall be liable to imprisonment for a term not exceeding six months or to a fine not exceeding two hundred pounds, or to both. Cf. Building Societies Act 1962, s. 25 (U.K.),H. Additional security for advances-( 1) In determining the amount of an advance to be made by a society to any member on the security of land, the society shall not have power to take into account the value of any additional security taken by the society for the advance, except- ( a) A charge on a policy of life insurance; or (b) A guarantee, conforming to such requirements (if any) as are prescribed; or (c) A security of such other kind or class as may be prescribed. (2) Where a charge on a policy of life insurance is taken as additional security for such an advance, the value of the policy shall be assessed at an amount not exceeding the surrender value of the policy at the time when the advance is made. (3) The amount of any such advanee shall not in any case exceed the value of the land on the security of which the advance is made, as assessed in accordance with section 40 of this Act. Cf. Building Societies Act 1962, s. 26 (1), (2) (U.K.) 42. Record of advances-( 1) Every society shall cause records to be kept showing, in respect of every advance made by the society after the commencement of this Act on the security of land,- (a) The value placed on the land in the report thereon under paragraph (b) of subsection (1) of section 40 of this Act, and the name of the person by whom the report was made; and

30 1965, No. 22 Building Societies 205 (b) Particulars of any additional security taken by the society. (2) If any society fails to comply with subsection (1) of this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. Building Societies Act 1962, s. 27 (U.K.) 43. Security taken from third party-( 1) This section applies to any advance made after the commencement of this Act by a society to any member (in this section referred to as the borrower) for the purpose of its being used in defraying the purchase price of land, where the society takes any security for the advance from another person: Provided that this section shall not apply to such an advance made to an individual where the only security taken for the advance from a third party is a guarantee given by an individual, not being a guarantee secured by a charge on any property. (2) Except by leave of the Court, no sums shall be recoverable, either by the society or by any other person, in respect of an advance to which this section applies, or in respect of any security given for such an advance, whether by the borrower or otherwise, and no rights shall be exercisable by virtue of any such security, unless, before any contract requiring the borrower to repay the advance is entered into, the society gives to the borrower a notice fulfilling the requirements of subsection (3) of this section. (3) The said requirements are that the notice is in writing and in the prescribed form and- ( a) States the amount of the basic advance and of the excess advance (if any) ; and (b) Contains such particulars as may be prescribed relating to any security for the advance which is taken or is to be taken from any person other than the borrower: Provided that where the borrower is an individual the notice need not refer to any guarantee by an individual, not being a guarantee secured by a charge on any property. ( 4) Where a society makes an advance to which this section applies without giving notice to the borrower in accordance with subsection (2) of this section, the Court, either on an application for leave for the purposes of that subsection, or on an application made by the borrower, may reopen the transaction and may make such orders as to the sums that may be recovered in respect of the advance and in

31 206 Building Societies 1965, No. 22 respect of any security given for it, and as to the exercise of any rights conferred by any such security, and as to any other matter connected with the advance, as the Court thinks just. Cf. Building Societies Act 1962, ss. 28, 130, Eighth Schedule (para. 4) (U.K.) 44. Arrangement for excess advance in connection with sale of property-( 1) This section applies to any contract for the acquisition of land where, at the time when the contract is made, there is in force, between a society and any person having a financial interest in the disposition of the land, an arrangement pursuant to which, in the event of the society making an advance comprising an excess advance for the purpose of its being used in defraying the purchase price of that land, a person will or may provide additional security in respect of the advance. (2) The person by whom any land is to be acquired pursuant to a contract to which this section applies may rescind the contract unless, before the contract was made, there was given to him a notice fulfilling the requirements of subsection (3) of this section. (3) The said requirements are that the notice ( a) Is in writing and in the prescribed form; and (b) States that the security taken by the society for any advance made by the society for the purpose of its being used in defraying the purchase price of the land in question may include additional security provided pursuant to such an arrangement as is mentioned in subsection (1) of this section. ( 4) Where a person is entitled by virtue of this section to rescind a contract, and he has paid a deposit in respect of the contract, he may recover an amount equal to the deposit from the person to whom the deposit was paid. Cf. Building Societies Act 1962, s. 29 (U.K.) 45. Implied warranty on advance to purchaser, unless notice given to the contrary-where a society makes to a member an advance for the purpose of its being used in defraying the purchase price of any land, the society shall be deemed to warrant to the member that the purchase price is reasonable, unless, before any contract requiring the member to repay the advance is entered into, the society gives to the member a notice in writing in the prescribed form stating

32 1965, No. 22 Building Societies 207 that the making of the advance will not imply any such warranty. Cf. Building Societies Act 1962, s. 30 (U.K.) 46. Representation as to sufficiency of security (1) Where- ( a) A society makes an advance on the security of any land; and (b) Any person having a financial interest in the disposition of the land or in the erection of a building thereon, or any person being a servant or agent of such a person, makes any representation that the making of that advance by the society imports or implies an assurance to the borrower that the land is sufficient security for the amount of the advancethe person who makes the representation shall, unless he satisfies the Court that he had reasonable grounds for believing it to be true, be guilty of an offence and be liable to imprisonment for a term not exceeding three months or to a fine not exceeding one hundred pounds, or to both. (2 ) Nothing in this section shall prejudice any other remedy in respect of the representation. Cf. Building Societies Act 1962, s. 31 (U.K.) 47. Restrictions on second mortgages-( 1) A society shall not advance money on the security of any land that is subject to a prior mortgage unless the amount of the advance together with the amounts of the principal sums secured by all prior mortgages at the time of the making of the advance do not exceed in the aggregate- (a) Two-thirds of the value of the land, as assessed in accordance with section 40 of this Act; and (b) Such additional amount as the society may lawfully advance on any additional security taken by the society for the advance. (2) If a society makes an advance in contravention of this section or of the terms or conditions of any exemption granted thereunder the directors of the society who authorised the advance shall be jointly and severally liable for any loss on the advance occasioned to the society. Cf. Building Societies Act 1962, s. 32 (U.K.) 48. Advance for single premium life policy-( 1) For the purpose of facilitating the repayment to a society of an advance made by the society to a member (in this section

33 208 Building Societies 1965, No. 22 referred to as "the borrower") on the security of land, the society may make to the borrower, by way of addition to the advance, a further advance of the whole or part of such sum as may be necessary to enable payment to be made of a single premium payable in respect of an appropriate policy of life insurance. (2) For the purposes of this section, a policy of life insurance is an appropriate policy if- (a) It is a policy of life insurance on the life of the borrower or the spouse of the borrower, or on the life of a person who, being a signatory to the mortgage of the land, is liable as a mortgagor under the covenants of the mortgage; and (b) It provides, in the event of the death, before the advance has been repaid, of the person on whose life the policy is effected, for payment of a sum not exceeding the amount sufficient to defray the sums that are, at and after the time of the death, payable to the society in respect of the advance as increased by such further advance as aforesaid. (3) A sum added to an advance pursuant to subsection (1) of this section shall be treated as not forming part of the advance for the purpose of determining whether the advance is beyond the powers of the society on the grounds that the amount of the advance is excessive. Cf. Building Societies Act 1962, s. 33 (U.K.) 49. Restriction on commissions for introduction of mortgage business-( 1) Subject to the provisions of this section, it shall not be lawful- (a) For a society, or any officer, servant, or agent thereof, to offer or give or agree to give to a person known to the society, officer, servant, or agent to have a financial interest in the disposition of any land or to be a servant of a person having such an interest; or (b) For a person having such an interest, or a servant of such a person, to receive or agree to receive from a society or from any officer, servant, or agent thereofany commission in consideration of the introduction of mortgage business to the society in connection with the disposition of the land in question, or in consideration of a promise to introduce such business to the society:

34 1965, No. 22 Building Societies 209 Provided that nothing in this subsection shall apply in respect of any individual who at the commencement of this Act is carrying on business as a real estate agent and is also a duly authorised agent of the society. (2) Where a society has a financial interest in the disposition of any land, subsection (1) of this section- (a) Shall not prohibit the society, or any officer, servant, or agent thereof, from offering or giving or agreeing to give, in relation to the disposition of that land, any commission to a servant of the society, unless to the knowledge of the society or of the officer, servant, or agent, as the case may be, he is a disqualified person for the purposes of this subsection; and (b) Shall not prohibit a servant of the society, not being a disqualified person for the purposes of this subsection, from receiving or agreeing to receive, in relation to such disposition, a commission from the society or from an officer, servant, or agent thereof. (3) Any reference in subsection (2) of this section to a disqualified person for the purposes of that subsection is a reference to a person who either himself has a financial interest in the disposition of the land in question or, in addition to being a servant of the society, is also a servant of another person who has such an interest. (4) For the purposes of this section, a person who is employed, otherwise than under a contract of service, in connection with the disposition of any land by a person who has a financial interest in the disposition thereof shall be treated, in relation to the disposition of that land, as a servant of the person having that interest, unless he carries on, independently of that person, the business of a solicitor, real estate agent, valuer, or auctioneer. (5) Nothing in this section shall be construed to prevent the payment to or receipt by a director of a society of his professional charges for services rendered by him otherwise than in his capacity as a director. (6) Any person who contravenes any of the provisions of this section commits an offence and shall be liable to imprisonment for a term not exceeding three months, or to a fine not exceeding two hundred pounds, or to both. (7) In this section, "commission" includes a gift. Cf. Building Societies Act 1962, s. 34 (U.K.) 50. Provisions as to sale of mortgaged property-( 1) Where any land has been mortgaged to a society as security for an advance, and the society sells that land or causes it to be

35 210 Building Societies 1965, No. 22 sold in the exercise of a power (whether statutory or express) exercisable by virtue of the mortgage, it shall be the duty of the society- (a) In exercising that power, unless the sale is through the Registrar of the Supreme Court, to take reasonable care to ensure that the price at which the land is sold is the best price that can reasonably be obtained; and (b) Within twenty-eight days from the completion of the sale, to send by registered post to the mortgagor, at the mortgagor's last known address, a notice containing the prescribed particulars of the sale. (2) So far as any agreement purports to relieve, or may have the effect of relieving, a society from the obligation imposed by paragraph (a) of subsection (1) of this section, the agreement shall be void. (3) If a society fails without reasonable cause to comply with paragraph (b) of subsection (1) of this section, the society shall be guilty of an offence; and every officer of the society who is bound by the rules of the society to fulfil the duty imposed by that paragraph, or, if there is no such officer, every director of the society, unless it appears that he was ignorant of or attempted to prevent the default, shall also be guilty of an offence. ( 4) A society or other person guilty of an offence under subsection (3) of this section shall be liable to a fine not exceeding twenty pounds, and, in the case of a continuing offence, to a further fine not exceeding one pound for every day during which the offence has continued. (5) Nothing in this section shall affect the operation of any enactment or rule of law relating to the duty of a mortgagee to account to a mortgagor. ( 6) In subsection ( 1 ) of this section, "mortgagor", in relation to a mortgage to a society, includes any person to whom, to the knowledge of the society, any of the rights or liabilities of the mortgagor under the mortgage have passed, whether by operation of law or otherwise. Cf. Building Societies Act 1962, s. 36 (U.K.) Advances on Security of Members' Shares 51. Limitation on advances on security of members' shares-( 1) The amount of any advance made by a society on the security of a member's shares shall not exceed threefourths of the amount actually paid on those shares at the time of the making of the advance.

36 1965, No. 22 Building Societies 211 (2) If any society makes an advance in contravention of this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. 1908, No. 18, s. 7 Supplementary Provisions 52. Power of Registrar to require actuary's certificate as to appropriations by ballot-( 1) The Registrar may at any time by notice in writing to a terminating society, being a society whose roles provide for shareholders to receive appropriations by ballot, call upon the society to furnish to him a certificate from an actuary, approved for the purposes of this section by the Minister, certifying that every member of the society, if his shate or shares are properly paid up in accordance with the rules, has a reasonable prospect of receiving appropriations within not more than thirty years from the date of the formation of the group of which he is a member. (2) If the society fails to furnish the certificate within one month after the date of the notice, or within such further time as the Registrar may in his discretion allow, the Registrar shall, by a further notice to the society, call upon the society so to amend its rules within three months after the date of the further notice as to enable such a certificate to be given. (3) If a society fails to comply with a further notice under subsection (2) of this section and to furnish the certificate within the said period of three months, the Registrar may present a petition for the winding up of the society under the Companies Act Cf. 1933, No. 41, s. 52 (2) 53. Memorandum of discharge of mortgage-for the purposes of section 79 of the Property Law Act 1952, a memorandum of discharge of a mortgage to a society shall be deemed to be duly executed if it is under the society's seal and countersigned by the manager or secretary of the society. Cf. 1908, No. 18, s. 47; Building Societies Act 1962, s. 37 (U.K.)

37 212 Building Societies 1965, No. 22 PART IV INVESTMENT AND BANKING OF SURPLUS FUNDS 54. Interpretation-In this Part of this Act, unless the context otherwise requires,- "Bank" has the same meaning as in the Banking Act 1908; and includes the Post Office Savings Bank, a trustee savings bank established under the Trustee Savings Banks Act 1948, and a private savings bank established under the Private Savings Banks Act 1964; but does not include any savings bank carried on by a building society: "Surplus funds" means funds of a society that are not immediately required for the purpose of making advances to its members in accordance with section 9 of this Act. Cf. 1908, No. 18, s. 27; Building Societies Act 1962, ss. 58 (4),59 (5) (U.K.) 55. Investment and banking of surplus funds-( 1) A society shall not invest any part of its surplus funds except ( a) In New Zealand Government securities; or (b) In stock or securities in respect of which the payment of interest is guaranteed by authority of Parliament; or ( c) In debentures, stock, bonds, or other securities of a local authority or public body which are for the purposes of section 4 of the Trustee Act 1956 authorised for the investment of money subject to a trust; or ( d) On deposit with a person for the time being authorised by the Reserve Bank of New Zealand to receive money on deposit as a short-term money market dealer, and only so long as there are hypothecated to the society by that dealer New Zealand Government securities that have, at the time of the making of the deposit, a value not less than the amount so deposited; or ( e) In advances to employees of the society by way of mortgage on the security of land owned by such employees and occupied or intended to be occupied by them for the purposes of their own residences, subject to the provisions of Part III of this Act relating to advances made to members on the security of land; or

38 1965, No. 22 Building Societies 213 (f) In advances to employees of the society, on such terms and conditions as it thinks fit, to enable them to purchase motor vehicles for use by them for the purposes of the society's business; or (g) In the case of a terminating society, in any such manner as aforesaid or on deposit with a permanent society, subject in the case of any such deposit to the requirements of any regulations made under this Act as to disclosure in the society's accounts of particulars of the deposit and of the rate of interest payable thereon. (2) So far as any surplus funds of a society are not invested in accordance with subsection (1) of this section and are not kept in cash in the custody of officers of the society, the society shall keep them on current account with or otherwise on deposit with or loan to a bank. (3) The foregoing provisions of this section shall not apply to surplus funds of a society represented by any investment made before the commencement of this Act under section 27 of the Building Societies Act 1908, so long as the society- (a) Continues to hold that investment; and (b) Does not enter into any transaction whose effect is to alter the terms on which the investment is held. (4) If a society contravenes any of the provisions of this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. 1908, No. 18, s. 27; 1932, No. 30, s. 31; Building Societies Act 1962, ss. 58 (1), 59 (1), 60, 61 (1) (U.K.) PART V BORROWING POWERS. INVESTORS AND DEPOSITORS 56. Borrowing powers-( 1) Subject to the provisions of this Act, a society may borrow money, and accordingly receive deposits or loans, at interest, to be applied for the purposes of the society. (2) In the case of a permanent society, the total amount so received and not repaid by the society shall not at any time exceed two-thirds of the aggregate of the following amounts, namely: (a) The amount of the principal sums for the time being secured to the society by mortgages of land from its members; and

39 214 Building Societies 1965, No. 22: (b) The amount for the time being invested by the society in New Zealand Government securities; and (c) The capital value (as ascertained in accordance with subsection (3) of section 2 of this Act) of any land owned by the society; and ( d) Any amount for the time being invested by the society in accordance with paragraph (d) of subsection (1) of section 55 of this Aot; and ( e) The amount of any funds of the society kept in cash in the custody of officers of the society or on current account with or otherwise on deposit with or loan to a bank within the meaning of section 54 of this Act. (3) In the case of a terminating society, the total amount so received and not repaid by the society shall not at any time exceed whichever is the greater of the following amounts, namely: (a) Two-thirds of the aggregate referred to in subsection ( 2) of this section; or (b) Twelve months' subscriptions on the shares for the time being in force. ( 4) In calculating, for the purposes of subsections (2) and (3) of this section, the amount for the time being secured to a society by mortgages of land from its members, there shall be deducted from that amount any amounts included therein in respect of premiums or similar charges in lieu of interest, and any amounts standing to the credit of borrowers' share accounts in respect of such mortgages in any case where the society's accounts show as assets the full amounts secured to the society by such mortgages. (5) In calculating, for the purposes of subsections (2) and (3) of this section, the amount for the time being secured to a society by mortgages of land from its members, there shall be deducted from that amount any amount secured by any such mortgage if, at the date of the society's last preceding annual return- (a) Payments under the mortgage were more than twelve months in arrear; or (b) The society had been in possession of the mortgaged land for twelve months or more. (6) For the purposes of this section, there shall be treated as money borrowed by the society money deposited with the society as security for an advance made by it to a member, or as security for a guarantee given in respect of such an advance.

40 1965, No. 22 Building Societies 215 (7) A person depositing money with or lending money to a society shall not be concerned to see to the application thereof or to see that the society has not exceeded the limits imposed by this Act or by the society's rules. (8) Except as provided by section 57 and subsection (8) of section 139 of this Act, no society shall permit the withdrawal of any money deposited with the society to be made by cheque or other order signed by or on behalf of the depositor. Cf. 1908, No. 18, s. 10 (a), (b), (c); 1944, No. 31, s. 35; Building Societies Act 1962, s. 39 (U.K.) 57. Restrictions on savings bank deposits-( 1) For the purposes of this section,- "Assets", in relation to any society, means the net total of the following amounts, namely- (a) The amount of the principal sums for the time being secured to the society by mortgages of land from its members; and (b) The amount for the time being invested by the society in accordance with section 55 of this Act; and (c) The capital value (as ascertained in accordance with subsection (3) of section 2 of this Act) of any land owned by the societyafter deducting from the total of those amounts all amounts included therein in respect of premiums or similar charges in lieu of interest, and all amounts standing to the credit of borrowers' share accounts in respect of mortgages to the society from its members in any case where the society's accounts show as assets the full amounts secured to the society by such mortgages: "Authorised society" means a society named in the Fourth Schedule to this Act: "Savings bank deposit" means any deposit of money repayable, as to the whole or part thereof, at call or at not more than twenty-eight days' notice, and otherwise received on conditions as to deposit, calculation of interest, or withdrawal similar or substantially similar to the conditions pertaining to deposits of money with the Post Office Savings Bank or with a trustee savings bank constituted under the Trustee Savings Bank Act 1948 or with a private savings bank constituted under the Private Savings Banks Act 1964.

41 216 Building Societies 1965, No. 22 (2) If any question arises as to whether any money accepted or proposed to be accepted is a savings bank deposit within the meaning of this section, the matter shall be determined by the Minister, whose decision shall be final and conclusive. (3) It shall not be lawful for any society, other than an authorised society, to accept or hold itself out as willing to accept savings bank deposits. ( 4) An authorised society shall not accept any savings bank deposit at any branch office or agency unless that branch office or agency is one at which such deposits were being accepted on the sixteenth day of July, nineteen hundred and sixty-five. ( 5) An authorised society shall not accept from any person any savings bank deposit that would have the effect of increasing the aggregate savings bank deposits (including accrued interest) held by that person beyond the sum of one thousand pounds. (6) In addition to the limits imposed by section 56 of this Act on the total amount that may be received by a society by way of deposits or loans, the aggregate amount of all savings bank deposits held by an authorised society, together with the interest accrued thereon, shall not at any time exceed- (a) The total paid up capital of the society, or the sum of four hundred thousand pounds, whichever is the less; or (b) Five per cent of the value of the assets of the society, if the said five per cent is greater than the sum ascertained in accordance with paragraph ( a) of this subsection. (7) Every authorised society that holds any savings bank deposits shall at all times hold in New Zealand Government securities an amount equal to at least thirty per cent of the total amount of savings bank deposits for the time being held by the society: Provided that the Minister may, subject to such conditions as he thinks fit, exempt any society wholly or partially from the provisions of this subsection for a period not exceeding one year from the commencement of this Act. (8) Subject to the provisions of this section, any depositor wishing to withdraw the whole or part of any savings bank deposit may be required to give not more than seven days' previous notice to the society in a form specified by the society.

42 1965, No. 22 Building Societzes 217 (9) Except as provided in subsection (10) of this section and subsection (8) of section 139 of this Act, every depositor making a withdrawal of the whole or part of any savings bank deposit shall, unless excused on special grounds, produce his depositor's book and shall sign an acknowledgment in the form specified by the society. The paying officer shall, unless production of the depositor's book is specially excused, enter the amount of the withdrawal therein. ( 10) Subject to any regulations made under this Act and to the society's rules, an authorised society may authorise the withdrawal by cheque or other order, in a form approved by it for the purpose, of the whole or part of any savings bank deposit held by any incorporated or unincorporated association, body, club, committee, or society which is not carried on for trade or profit and which is approved by the authorised society for the purposes of this subsection. (11) Subject to the provisions of this Act and of any regulations made thereunder, savings bank deposits may be accepted by an authorised society, and withdrawals made, upon or subject to such terms and conditions as may be prescribed by the society's rules. Cf. 1932, No. 30, s. 32; 1955, No. 97, s. 6; 1957, No. 106, s. 18; Building Societies Act 1962, s. 42 (U.K.) 58. Interest on deposits-( 1) For the purposes of this section, "deposit" means any money deposited with a society, whether it is a savings bank deposit or not; and includes any sum paid to a society in consideration of the issue of any debenture, deposit note, or other document acknowledging the indebtedness of a society to the holder. (2) The Governor-General may from time to time, by Order in Council, fix the maximum rates of interest that may be paid by any society on deposits; and may in like manner exempt any society or any class of societies from the operation of any such order, either generally or in respect of any deposits or class of deposits and either unconditionally or upon or subject to such conditions as may be specified in the order. (3) Any such order may fix different rates with respect to different classes of deposits to be therein defined, or according to the amount of any deposit. (4) Any such order may apply to future deposits only or may apply both to such deposits and to deposits existing at the date of the order:

43 218 Building Societies 1965, No. 22 Provided that in respect of such existing deposits the order shall not apply- (a) In the case of a deposit repayable immediately on notice or demand, to interest before the date of the order: (b) In the case of a deposit otherwise repayable on notice or demand, to interest before the earliest date on which the deposit could have been made repayable by notice or demand given on the date of the order: ( c) In the case of a deposit otherwise repayable, to interest before the date fixed for repayment or, as the case may be, the date of any renewal or the date on which any variation of the terms on which the deposit is held takes effect. (5) Every such order shall, according to its tenor, take effect on the date of its publication or on such later date as may be specified therein. (6) If a society pays or offers to pay, or advertises or otherwise represents that it is willing to pay, interest on any money deposited with it in excess of the rate or of the appropriate rate fixed by any such order, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. 1932, No. 6, ss. 51 (1) (a), 51A; 1932, No. 18, s. 15; 1960, No Liability for borrowing in excess of powers-if any society receives or accepts loans or deposits in excess of the limits prescribed by this Act, the directors of the society shall be personally liable for the amount so received or accepted in excess, and for the interest payable on that amount. Cf. 1908, No. 18, s. 50; Building Societies Act 1962, s. 40 (U.K.) 60. Assistance to other building societies-where it appears to the Registrar that any society is in financial difficulties he may, with the consent of the Minister, authorise any other society to lend money to the first-mentioned society, and the society shall have power to do so accordingly. Cf. Building Societies Act 1962, s. 44 (U.K.) 61. New investors and depositors to receive copies of accounts-( 1) Every person who subscribes for shares in or deposits money with or lends money to a society shall, on first becoming a subscriber or depositor or lender as afore-

44 '1965, No. 22 Building Societies 219 said, be entitled to receive from the society, if he so requests, a copy of the latest revenue and appropriation account and balance sheet of the society, together with a copy of the auditors' report and the directors' report. (2) If a society fails to comply with subsection (1) of this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. (3) On a prosecution for an offence against this section, it shall be a defence to prove that the society had taken all reasonable steps to make arrangements to comply with this section, and that the offence was due to inadvertence or exceptional circumstances. Cf. 1908, No. 18, s. 45 (1); Building Societies Act 1962, s.45 (U.K.) 62. Depositor under age of twenty-one-a receipt or acknowledgment given to a society by a person under the age of twenty-one years, in respect of the payment to him of any sum due in respect of the principal of or interest on sums lent by him to the society, shall not be invalid on the ground that he is under that age. Cf. Building Societies Act 1962, s. 47 (U.K.) 63. Designation of societies for investments by trustees ( 1) The Governor-General may from time to time by Order in Council, if he is satisfied that any society fulfils such require. ments as to its assets and liabilities, liquid funds, reserves, and other matters as may be prescribed, designate the society as one with which trustees may, subject to subsection (4) of this section, invest trust funds by way of deposit. (2) Without limiting the power to make regulations conferred by section 137 of this Act, regulations made for the purposes of subsection (1) of this section shall, in prescribing the requirements to be fulfilled by a society thereunder, make provision to the effect that- (a) The society's assets shall amount to not less than one hundred thousand pounds: (b) The total liabilities of the society shall not exceed three times the amount of shareholders' funds: ( c) The society's liquid funds shall be not less than seven and a half per cent of its assets, and not less than twenty per cent of the total amount of its liabilities in respect of deposits, loans, and other borrowings at interest:

45 220 Building Societies 1965, No. 22 ( d) All money owing by the society in respect of deposits, loans, and other borrowings at interest shall be wholly unsecured: ( e) The society's free reserves shall be not less than two and a half per cent of its assets. (3) Such regulations may make provision- (a) Defining terms used in the regulations, and in particular defining assets, liabilities, shareholders' funds, liquid funds, free reserves, deposits, loans, and borrowings at interest, for any of the purposes of this section and of the regulations: (b) Generally for giving full effect to this section. (4) Where a society has been so designated and the designation has not been revoked, the powers of a trustee under section 4 of the Trustee Act 1956 shall include power to invest trust funds in his hands by depositing with the society amounts not exceeding in the aggregate ten thousand pounds for anyone trust. Cf. House Purchase and Housing Act 1959, s. 1 (U.K.); Trustee Investments Act 1961, ss. 1, 16 (U.K.) PART VI POWERS OF CONTROL OF REGISTRAR 64. Power to order suspension of borrowing and subscriptions for shares-( 1) Subject to section 65 of this Act, if in respect of any society the Registrar considers it expedient to do so in the interests of investors and depositors, he may, by an order made with the consent of the Minister, apply subsection (2) of this section to the society. (2) Subject to the provisions of this section, while any such order continues in force the society shall not- (a) Accept the deposit of, or otherwise borrow, any money; or (b) Accept any payment representing the whole or any part of the amount due by way of subscription for a share in the society, other than a payment that fell due before the making of the order. (3) Any order under this section may be revoked by a subsequent order made by the Registrar with the consent of the Minister. ( 4) This section shall not make it unlawful for a society to borrow from a bank within the meaning of the Banking Act 1908, or from any body corporate whose ordinary business

46 1965) No. 22 Building Societies 221 includes the business of lending money, or from a director or other officer of the society, if the society has obtained the consent in writing of the Registrar. (5) If a society contravenes the provisions of subsection (2) of this section, it shall be guilty of an offence and shall be liable on conviction on indictment to a fine not exceeding five hundred pounds; and every officer of the society who is in default shall be guilty of an offence and shall be liable on conviction on indictment to imprisonment for a term not exceeding two years or to a fine not exceeding five hundred pounds, or to both. (6) The reference in this section to the amount due by way of subscription for a share in a society does not include a reference to any amount due in respect of a share that represents interest on, or the repayment of, an advance made to the holder of the share. (7) In this section and section 65 of this Act, "investors and depositors" means persons who have invested or deposited or may invest or deposit money with the society. Cf. Building Societies Act 1962, ss. 48, 49 (7) (U.K.) 65. Procedure to be followed in making order-(1) Not less than fourteen days before making an order under subsection ( 1 ) of section 64 of this Act, the Registrar shall serve on the society, and on every director thereof, a notice stating that he proposes to make such an order. (2) The notice served on the society shall specify the considerations that have led the Registrar to conclude that it would be in the interests of investors and depositors to make such an order, and shall specify a period (not being less than fourteen days from the date on which the society is served with the notice) within which the society may make representations to him with respect to the notice. (3) The Registrar shall consider any representations made by the society within the period so specified or within such further period as he may allow, and, if the society so requests, shall afford to it an opportunity of being heard by him within the period so specified or allowed. ( 4) If the Registrar makes any such order he shall serve on the society, and on every director thereof, a notice that it has been made. In the notice to the society, or in a separate notice served therewith, the Registrar shall specify the considerations that have led him to conclude that it is expedient to make the order in the interests of investors and depositors.

47 222 Building Societies 1965, No. 22 (5) The Registrar shall not have power to make such an order unless all the considerations specified in the notice to the society under subsection (4) of this section were those, or were among those, specified in the notice served on the society under subsections (1) and (2) of this section. (6) Any notice to a director under this section may be served on him by posting it by registered letter addressed to him at his latest address as notified to the Registrar by the society or the director. If so posted, it shall be deemed to have been served at the time when the registered letter would be delivered in the ordinary course of post. (7) Failure to serve a notice on a director under this section shall not affect the validity of any such order. (8) Notice of the making or revocation of any such order shall be published by the Registrar in the Gazette and in such other ways as appear to him expedient for informing the public, and shall also be sent by him to the appropriate District Registrar of Companies. Cf. Building Societies Act 1962, s. 49 (1) - ( 6 ) (U.K.) 66. Provisions consequential on Registrar's order-( 1) This section shall apply where an order is made under subsection ( 1) of section 64 of this Act. (2) Where, at the time when the order is made, a member is under an obligation to make payments to the society representing instalments of the amount due by way of subscription for a share in the society, the obligation shall be suspended in respect of each instalment for the period during which the order continues in force; and if the order is revoked the sum due shall again become payable by instalments. This subsection shall be read subject to anything in the rules of the society, or in any agreement between the society and the member, as to the time or method of payment, after the revocation of the order, of instalments that fell due during the continuance of the order. (3) Subject to subsection (2) of this section, any obligation to make any payment which, under section 64 of this Act, the society is prohibited from accepting shall be wholly rescinded. ( 4) Subject to the proviso to subsection (2) of section 11 of this Act, it shall be the duty of the society to make reasonable arrangements for using its funds to meet applications by depositors or holders of shares in the society (being applications duly made in accordance with its rules) for repayment of the money deposited or subscribed by them.

48 1965, No. 22 Building Societies 223 (5) If it appears to the Registrar that, at any time while the order continues in force, the society has been applying an undue proportion of its funds in making advances, in preference to meeting such applications as are mentioned in subsection (4) of this section, he may, after giving notice to the society and affording it an opportunity of making representations, present a petition for the winding up of the society under the Companies Act (6) Subsection (6) of section 64 of this Act shall apply for the purposes of this section as it applies for the purposes of that section. Cf. Building Societies Act 1962, s. 50 (U.K.) 67. Power to give directions as to 'advertising-( 1) Subject to section 68 of this Act, if in respect of any society the Registrar considers it expedient to do so in the interests of persons who may invest or deposit money with the society, he may with the consent of the Minister serve on the society a notice giving a direction under this section. (2) The direction may do anyone or more of the following things, namely: ( a) Prohibit the issue by the society of advertisements of all descriptions: (b) Prohibit the issue by the society of advertisements of any description specified in the direction: ( c) Prohibit the issue by the society of any advertisements that are, or are substantially, repetitions of an advertisement that has been issued and that is specified in the direction: ( cl) Require the society to take all practicable steps to withdraw any advertisement, or any description of advertisement, specified in the direction, that is on display in any place. (3) Any such direction may be varied or revoked at any time by a subsequent direction under this section. ( 4) If at any time while the direction continues in force the society contravenes the direction, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. Building Societies Act 1962, ss. 51, 52 (6) (U.K.) 68. Procedure to be followed in giving direction-( 1) Not less than one week before giving a direction under section 67 of this Act, the Registrar shall serve on the society, and on

49 224 BuildingS ocieties 1965, No. 22 every director thereof, a notice stating that he proposes to give such a direction. (2) Any such notice served on the society shall specify the considerations that have led the Registrar to conclude that it would be in the interests of persons who may invest or deposit money with the society to give such a direction, and shall state that representations may be made to him with respect to the notice within the period of one week from the date on which the society is served with the notice. (3) The Registrar shall consider any representations made to him by the society within the said period of one week, and, if the society so requests, shall afford to it an opportunity of being heard by him within that period. ( 4) If the Registrar gives such a direction he shall- ( a) Serve on every director of the society a notice of the giving of the direction; and (b) Specify in the notice of direction served on the society under subsection (1) of section 67 of this Act, or in a separate notice to the society served therewith, the considerations that have led him to conclude that it is expedient to give the direction in the interests of persons who may invest or deposit money with the society. (5) The Registrar shall not have power to give such a direction unless all the considerations specified in such notice of direction or in the separate notice to the society under subsection ( 4 ) of this section were those, or were among those, specified in the notice served on the society under subsections (1) and (2) of this section. (6) Subsections (6) and (7) of section 65 of this Act shall apply for the purposes of this section as they apply for the purposes of that section, and as if the reference to an order in the said subsection (7) were a reference to a direction. (7) References in this section to a direction under section 67 of this Act include references to a direction varying a previous direction, but do not include references to a direction revoking a previous direction. Cf. Building Societies Act 1962, s. 52 (1) -( 5), (7) (U.K.) 69. Power to require documents and information-( 1) The Registrar may at any time serve on a society, or on any person who has in his possession or under his control any books, accounts, deeds, instruments, or other documents relating to the business of a society, a notice requiring the

50 1965, No. 22 Building Societies 225 society or person to produce to the Registrar such of those documents as the Registrar considers necessary for the exercise of his powers under the foregoing provisions of this Part of this Act: Provided that the Registrar shall not have power to require the production of documents that do not belong to the society, and are not deeds or instruments relating to property mortgaged to the society,- (a) From a person who is or has been an auditor of the society; or (b) From anyone other than a person who is or has been an officer or servant of the society. (2) The Registrar may also at any time serve on a society, or on any person who is or has been an officer or servant of a society, a notice requiring the society or person to furnish him with such information relating to the society's business as the Registrar considers necessary for the exercise of his powers under the foregoing provisions of this Part. (3) Any notice under subsection (2) of this section may require that any information to be given pursuant to the notice shall be verified by statutory declaration. ( 4) If a society fails to comply with the requirements of a notice under this section, the society shall be guilty of an offence against this Act; and every officer of the society who is in default shall be guilty of an offence and shall be liable to imprisonment for a term not exceeding three months or to a fine not exceeding two hundred pounds, or to both. (5) If any person other than a society fails to comply with the requirements of a notice under this section, he shall be guilty of an offence and shall be liable to imprisonment for a term not exceeding three months or to a fine not exceeding two hundred pounds, or to both. (6) The Registrar may, if he considers it just, direct that all or any of the expenses incurred by him under this section in relation to a society shall, either wholly or to such extent as he may determine, be defrayed out of the funds of the society, or by the officers or former officers of the society or any of them. (7) Any society, or officer or former officer of a society, directed to pay any sum under subsection (6) of this section may appeal to the Court against the direction, on the ground that the sum ought to be defrayed by some other of the persons who may be directed to defray expenses under that subsection; and the Court may, if it thinks fit, vary any such direction accordingly. A9

51 226 Building Societies 1965, No. 22 (8) Subject to subsection (7) of this section, any sum that a society or person is required to pay by a direction under this section shall be recoverable from the society or person as a debt due to the Crown. Cf. Building Societies Act 1962, ss. 53,54 (U.K.) 70. Special powers of direction in relation to small societies-( 1) Where in the case of a society whose assets do not exceed one hundred thousand pounds in value- ( a) There has in the opinion of the Registrar been a change in the scale or character of the business carried on by the society, or arrangements have in his opinion been made for such a change; and Cb) The Registrar considers it expedient to do so in the interests of persons who have invested or deposited, or may invest or deposit, money with the societythe Registrar may, subject to section 71 of this Act, serve on the society a notice under this section. (2) A notice under this section shall state that unless, within such period (not being less than two months from the date on which the society is served with the notice) as may be specified in the notice, there is produced to the Registrar evidence to his satisfaction as to the matters specified in subsection (3) of this section, he proposes to give a direction that the society shall not- ( a) Issue any shares or lend or borrow any money; or (b) Issue or cause to be issued any advertisement. (3) The said matters are- (a) That the directors of the society, or, as the case may be, one or more of them, have been issued with shares in the society on terms that conform to the requirements of the Second Schedule to this Act; and (b) That the value of the shares (taking into account, in a case where more than one director has been issued with such shares, the shares issued to all the directors') amounts to five thousand pounds or more; and (c) That there has been paid to the society in cash for those shares a sum or sums amounting in all to five thousand pounds or more. e 4) A notice under this section shall also state that representations may be made to the Registrar with respect to the notice within the period of one month from the date on which the society is served with the notice.

52 1965, No. 22 Building Societies 227 (5) The Registrar shall consider any representations made to him by the society within the said period of one month, and, if the society so requests, shall afford to it an opportunity of being heard by him within that period. ( 6) If at the end of the period specified in the notice under subsection (2) of this section for the production of evidence as aforesaid the Registrar has not received evidence to his satisfaction as to the matters specified in subsection (3) of this section, he may at any time thereafter give to the society a direction that, while the direction is in force, the society shall not- ( a) Issue any shares or lend or borrow any money; or (b) Issue or cause to be issued any advertisement. (7) If, at the end of the period of two months beginning with the date on which he gives the direction, such evidence as aforesaid has not been received by the Registrar, he may, after giving to the society at least 0ne month's notice of his intention to do so, present a petition for the winding up of the society under the Companies Act (8) If at any time after the Registrar gives the direction and before he presents a petition for the winding up of the society he receives such evidence as aforesaid, he shall rescind the direction. (9) If a society contravenes a direction under this section, it shall be guhty of an offence and shall be liable on conviction on indictment to a fine not exceeding five hundred pounds; and every officer of the society who is in default shall be guilty of an offence and shall be liable on conviction on indictment to imprisonment for a term not exceeding two years or to a fine not exceeding five hundred pounds, or to both. Cf. Building Societies Act 1962, ss. 55, 56 (6) (U.K. ) 71. Supplementary provisions as to small societies ( 1) The Registrar shall not serve a notice under subsection (1) of section 70 of this Act at any time within five years from the date on which the society was established. (2) In the case of a society where the directors have subscribed for shares in compliance with a notice under the said section 70, the Registrar shall not serve a further notice under that section at any time within five years from the date of the service of the previous notice. (3) It shall be the duty of every society whose assets do not exceed one hundred thousand pounds in value to furnish the Registrar with such information as he may from time to A9*

53 228 Building Societies 1965, No. 22 time require for the purpose of ascertaining whether there has been a change in the scale or character of the business carried on by it, or whether arrangements are being made for such a change. (4) A society shall have power to issue shares in compliance with the said section 70, notwithstanding anything in the rules of the society. ( 5) The provisions of the Second Schedule to this Act shall have effect with respect to shares issued in compliance with subsection (4) of this section, for the purpose of ensuring that the conditions attaching to the shares are observed until the end of the period of five years beginning with the date of the sending of the notice under the said section 70. (6) If a society fails to comply with any requirement of the Registrar under subsection (3) of this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. Building Societies Act 1962, s. 56 (1) - ( 5), (7) (U.K.) PART VII MANAGEMENT AND ADMINISTRATION Registered Office 72. Registered office of society-( 1) Every society shall, as from the date of its incorporation, have a registered office in New Zealand to which all communications and notices may be addressed. (2) Subject to the provisions of this Act, the registered office of a society shall be that specified in its rules. (3) Where the chief office of any society incorporated before the date of the commencement of this Act and in existence on that date is not the office as specified in its rules, the society shall notify the Registrar, within one month after that date, of the situation of its chief office, and that office shall, until notice of any change is given to the Registrar, be the registered office of the society for the purposes of this Act. On receipt of the notification, the Registrar shall forthwith notify the appropriate District Registrar of Companies of the situation of that office. ( 4) If a society fails to comply with subsection (3) of this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act.

54 1965, No. 22 Building Societies Change of registered office-( 1) Where a society changes the situation of its registered office notice of the change shall be given to the Registrar by the society within fourteen days after the date of the change; and on receipt of the notice the Registrar shall issue to the society a certificate of registration of the office. (2) On issuing such a certificate the Registrar shall give notice of the change to the appropriate District Registrar of Companies. (3) It shall not be necessary to alter the rules of a society by reason only that its registered office is changed. ( 4) If a society fails to give notice to the Registrar in accordance with subsection (1) of this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. Building Societies Act 1962, s. 108 (U.K.) Register of Members 74. Duty to keep register-(1) Every society shall keep a register of the names and addresses of its members. (2) Subject to subsection (3) of this section, the register shall be kept at the society's registered office. (3) Wi,th the consent in writing of the Registrar, the register, or parts of it, may be kept at one or more of the offices of the society other than its registered office. ( 4) If a society contravenes any of the provisions of this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. Building Societies Act 1962, s. 62 (U.K.) 75. Right of member to obtain particulars-( 1) At any time- ( a) While an order is in force with respect to a society under section 64 of this Act; or (b) When a written request to withdraw any share in a society has been given to the society more than six months previously by a member entitled to do so, and the society has (whether in reliance on a provision in its rules or otherwise) not yet complied with the request; or ( c) In the twelve months following a financial year in which the holders of shares in a permanent society did not become entitled to any interest or dividend on their shares-

55 230 Buildin g Societies 1965, No. 22 any member of the society shall have the right to obtain from the register of members the names and addresses of members of the society, for the purpose of communicating with them on any subject relating to the society's affairs. (2) If at any other time any member of any society applies in writing to the Registrar for the right to obtain names and addresses from the register, the Registrar, if satisfied that the applicant requires that right for the purpose of communicating with members on a subject relating to the society's affairs, and having regard to the interests of the members as a whole and to all the other circumstances, may direct that the applicant shall have that right for that purpose. (3) Any direction under subsection (2) of this section may be given subject to such limitations or conditions as the Registrar thinks fit. ( 4) Before giving a direction under this section, the Registrar shall give particulars of the application to the society, and shall afford to the society an opportunity of making representations to him thereon, and shall, if the applicant or the society so requests, afford to the applicant and the society an opportunity of being heard by him. ( 5) Any member entitled under this section to obtain the names of members may apply in writing to the society, describing in the application the subject on which he proposes to communicate with members; and the society shall give him all necessary information as to the place or places where the register or any part of it is kept, and reasonable facilities for inspecting the register and taking a copy of any names and addresses in the register. ( 6) A society shall not be obliged to disclose to a member under this section any particulars other than the names of the members and their addresses, and may construct the register in such a way that it is possible to open the names and addresses to inspection without exposing any other particulars. Cf. Building Societies Act 1962, s. 63 (U.K.) M eetin.~s and Resolutions 76. Annual general meeting-( 1) Subject to the provisions of this section, every society shall in the first four months of every financial year hold a meeting as its annual general meeting, in addition to any other meetings held in that year. (2) The annual general meeting shall be described as such in the notices calling it.

56 1965, No. 22 Building Societies 231 ( 3) A society need not hold an annual general meeting in the financial year in which it is incorporated. ( 4) If in any financial year default is made in holding an annual general meeting in accordance with the foregoing provisions of this section, the Registrar may call or direct the calling of an annual general meeting in that financial year, and may give such ancillary or consequential directions as he thinks fit, including directions modifying or supplementing the operation of the society's rules in relation to the calling, holding, and conducting of the meeting. (5) If default is made in holding an annual general meeting in accordance with subsections ( 1 ) and (2) of this section, or in complying with any directions of the Registrar under subsection (4) of this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. Building Societies Act 1962, s. 64 (U.K.) 77. Length of notice of meetings-( 1) Any provision in a society's rules shall be void so far as it provides for the calling of a meeting of the society, other than an adjourned meeting, by a shorter notice than fourteen clear days' notice in writing. (2) Except so far as the rules of a society make other provision in that behalf (not being a provision made void by subsection (1) of this section), a meeting of a society, other than an adjourned meeting, may be called by not less than fourteen clear days' notice in writing. (3) Where notice is given in accordance with subsection (2) of this section, the notice shall be taken for the purposes of this Act or any other Act to have been duly given according to the society's rules. (4) Notice of a meeting of a society shall not be sent to its members more than fifty-six days before the date of the meeting. Cf. Building Societies Act 1962, s. 65 (U.K.) 78. Persons entitled to notice of meetings-( 1) Written notice of any meeting of a society which specifies the intention to propose a resolution as a special resolution at the meeting shall be sent to every member qualified to vote on a special resolution at the meeting. (2) Subject to subsection (1) of this section, written notice of any meeting of a society shall be sent to every member of the society:

57 232 Building Societies 1965, No. 22 Provided that, subject as aforesaid and to the society's rules, notice of a meeting is not required by virtue of this subsection to be sent to a member- (a) If at the relevant time the member did not, or, as the case may be, does not, hold shares in the society to a value of twenty-five pounds or more; or (b) In the case of a meeting called by a terminating society for the purpose of conducting appropriations or ballots for advances, if the meeting is called by advertisement. (3) For the purposes of paragraph (a) of the proviso to subsection (2) of this section, the relevant time- ( a) If the society was established in the financial year in which the notices are being sent, is the time at which the notices are sent; and (b) In any other case, is the end of the financial year preceding that in which the notices are sent. ( 4) An accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive notice of the meeting shall not invalidate the proceedings at that meeting. Cf. Building Societies Act 1962, s. 66 (U.K.) 79. Proxies-( 1) Any member of a society entitled to attend and vote at a meeting of the society shall be entitled to appoint another person, whether a member or not, as his proxy to attend and, subject to subsection (2) of this section, to vote instead of him. (2) Unless the society's rules otherwise provide, a proxy shall not be entitled to vote except on a poll. (3) In every notice calling a meeting of a society there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint a proxy, or, where that is allowed, one or more proxies, to attend and vote instead of him, and that a proxy need not also be a member. ( 4) If default is made in complying with subsection (3) of this section in respect of any meeting, every officer of the society who is in default shall be guilty of an offence against this Act. (5) Any provision in a society's rules shall be void so far as it would have the effect of requiring the instrument appointing a proxy, or any other document necessary to show the validity of or otherwise relating to the appointment of a

58 1965, No. 22 Building Societies 233 proxy, to be received by the society or any other person more than seventy-two hours before a meeting or adjourned meeting in order that the appointment may be effective thereat. (6) If for the purpose of any meeting of a society invitations to appoint as proxy a person or one of a number of persons specified in the invitations are issued at the society's expense to some only of the members entitled to be sent a notice of the meeting and to vote thereat by proxy, every officer of the company who knowingly and wilfully authorises Or permits their issue as aforesaid shall be guilty of an offence against this Act: Provided that an officer shall not be liable under this subsection by reason only of the issue to a member at his request in writing of a fonn of appointment naming the proxy or of a list of persons willing to act as proxy if the form is available on request in writing to every member entitled to vote at the meeting by proxy. (7) This section shall apply to meetings of any class of members of a society as it applies to general meetings of the society. Cf. Building Societies Act 1962, s. 67 (U.K.) 80. Right to demand a poli-( 1) Any provision in a society's rules shall be void so far as it would have the effect either- (a) Of excluding the right to demand a poll, at a meeting of the society, on any question other than the election of a chainnan of the meeting or the adjournment of the meeting; or (b) Of making ineffective a demand for a poll on any such question which is made by not less than ten members having the right to vote at the meeting. (2) The instrument appointing a proxy to vote at a meeting of a society shall be taken also to confer authority to demand or join in demanding a poll; and for the purpo~es of subsection (1) of this section a demand by a person as proxy of a member shall be the same as a demand by the member. Cf. Building Societies Act 1962, s. 68 (U.K.) 81. Special resolutions-( 1) A resolution of a society shall be a special resolution when it has been passed by not less than three-fourths of the number of the members of the society qualified to vote on a special resolution, and votin~,

59 234 Building Societies 1965, No. 22 in person or by proxy, on a poll on the resolution, at a meeting of the society of which notice specifying the intention to move the resolution as a special resolution has been duly given. (2) The members qualified to vote on a special resolution' at a meeting of the society shall be all the members who were also members at the end of the last financial year before the date of the meeting, except that, if the society's rules so provide, members who at the end of that financial year did not, or at the date of the meeting do not, hold shares in the society to a value of one pound or more shall not be qualified to vote. (3) For the purposes of this section- (a) Notice of a meeting shall be taken to be duly given if the notice is given in the manner provided by this Act and by the society's rules: (b) A meeting of a society shall be taken to be duly held if it is held in the manner provided by the society's rules. (4) Notwithstanding anything in a society's rules, the business that may be dealt with at the annual general meeting, or at any other meeting, shall include any resolution to be passed as a special resolution. ( 5) In any rules made by a society after the commencement of this Act, the expression "special resolution", unless the context otherwise requires, means a special resolution as defined in this section. Cf. Building Societies Act 1962, s. 69 (U.K.) 82. Notices of special resolutions-( 1) If a member of a society gives notice in writing to the society of his intention to move a special resolution at a meeting of the society, the society shall include in the notice of the meeting a notice specifying the intention to move that resolution as a special resolution. (2) If the member does not specify the meeting at which he intends to move the resolution, or if he specifies a meeting that will be held fifty-six days or less after the date of the receipt by the society of the member's notice, the society shall act on the footing that he intends to move the resolution at the first meeting held more than fifty~six days after that date. (3) If a society fails to comply with subsection (1) of this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act.

60 1965, No. 22 Building Societies 235 ( 4) In this section, the expression "special resolution" means a resolution that will not be effective unless it is passed as a special resolution. Cf. Building Societies Act 1962, s. 70 (U.K.) Directors and other Officers 83. Directors-Every society shall have at least two directors. 84. Giving of security by officers of society-before any officer of a society entrusted by the society with the custody or control of money enters on the duties of his office, the society shall obtain such security as it considers sufficient for the faithful execution of his duties. Cf. 1908, No. 18, s. 25; Building Societies Act 1962, s.71 (U.K.) 85. Duty of officers to account-( 1) Every such officer as is mentioned in section 84 of this Act shall- (a) On demand, or if required to do so by notice in writing given or left at his usual or last place of residence, render an account, as may be required by the directors of the society, to be examined and allowed or disallowed by them; and (b) On the like demand or notice, pay over all the money remaining in his hands, and deliver all securities and effects, books, papers, and property of the society in his custody, to such person as the society may appoint. (2) Any duty imposed by subsection ( 1) of this section on an officer shall, after his death, be taken to be imposed on his personal representatives. (3) In the case of any neglect or refusal to comply with the foregoing provisions of this section, the society may sue on any bond given by the officer, or may apply to the Court to enforce the demand or notice. ( 4) On any application to the Court under this section the Court may make such order as it thinks fit. Cf. 1908, No. 18, s. 26; Building Societies Act 1962, s. 72 (U.K.) 86. Disclosure of interest by directors-( 1) Subject to the provisions of this section, every director of a society who is in any way, directly or indirectly, interested in a contract

61 236 Building Societies 1965, No. 22 or proposed contract with the society shall declare the nature of his interest to the board of directors in accordance with this section. (2) In the case of a proposed contract, the declaration required by this section shall be made at the meeting of the directors at which the question of entering into the contract is taken into consideration or, if the director was not at the date of that meeting interested in the proposed contract, at the next meeting of the directors held after he becomes interested in the proposed contract. (3) Where the director becomes interested in a contract with the society after it is made, such declaration shall be made at the first meeting of the directors held after he becomes interested in the contract. (4) For the purposes of this section, a general notice given by a director, at a meeting of the directors, to the effect that he is a member of a specified company or firm, and is to be regarded as interested in any contract that may thereafter be made with that company or firm, shall be a sufficient declaration of interest in relation to any such contract. (5) A declaration or notice under this section need not be made or given by the director in person at the meeting, if the director takes reasonable steps to ensure that it is brought up and read at the meeting. (6) A director who fails to comply with the provisions of this section commits an offence against this Act. (7) Nothing in this section shall prejudice the operation of any rule of law restricting directors of a society from having any interest in contracts with the society. Cf. Building Societies Act 1962, s. 73 (U.K.) 87. Officers not to accept commissions in connection with advances-( 1) No director, manager, secretary, or other officer of a society shall, in addition to his remuneration as an officer of the society, accept from any other person any commission for or in connection with any advance made by the society. (2) Where- (a) A charge upon a policy of life insurance is given as additional security for an advance made by a society; or (b) A society makes an additional advance to enable payment to be made of a premium on a policy of insurance; or

62 1965, No. 22 Building Societies 237 (c) Any policy of insurance is taken out so as to comply with the terms on which an advance is made by a society, whether by way of insuring the property given as security for the advance or otherwiseand the policy is effected through the society, or the society nominates or selects a person by whom the policy is to be issued, it shall be unlawful for a director or other officer of the society, in connection with the effecting of the policy, to receive any commission from a person by or through whom the policy is issued. (3) If any director or other officer contravenes any of the foregoing provisions of this section- (a) He commits an offence and shall be liable to imprisonment for a term not exceeding six months or to a fine not exceeding fifty pounds, or to both; and (b) If, having been convicted of an offence against subsection (1) of this section, he fails to pay to the society the amount or value of the commission referred to in that subsection, as and when directed to do so by the convicting Court, he commits a further offence and shall be liable to imprisonment for a term not exceeding six months or to a fine not exceeding fifty pounds, or to both. ( 4) If any person pays to any director or other officer any commission to which this section applies, he commits an offence and shall be liable to imprisonment for a term not exceeding six months or to a fine not exceeding fifty pounds, or to both. (5) Notwithstanding anything in the foregoing provisions of this section, where before the first day of August, nineteen hundred and sixty-five, any director or other officer of a society has entered into an arrangement whereby he is entitled to receive commissions from any person by or through whom there is issued any policy of insurance to which subsection (2) of this section relates, it shall be lawful for that director or officer to continue to receive such commissions, and for that person to continue to pay such commissions to him, during a period of twelve months from the commencement of this Act. (6) In this section, "commission" includes any gift, bonus, or benefit. Cf. Building Societies Act 1952, s. 74 (U.K.) 88. Notice of changes in holding of certain offices ( 1) Whenever a person becomes or ceases to be a director or the manager or secretary of a society, the society shall within one month thereafter give notice to the Registrar, in duplicate,

63 238 Building Societies 1965, No. 22 stating the full name and address of that person, and particulars of the office that he has taken or relinquished. (2) The Registrar shall send one copy of the notice to the appropriate District Registrar of Companies. (3) If a society fails to comply with this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. Building Societies Act 1962, s. 75 (U.K.) Office Management 89. Office management-( 1) Every society shall establish and maintain a system to ensure the safe custody of all mortgage instruments, deeds, and documents of title belonging to or held by the society. (2) A society shall not be taken to have established a proper system under. this section unless, under the system, on each occasion on which any such instrument, deed, or document of title is released from such safe custody, the consent is obtained of the board of directors or of a person authorised by the board to give such consent. (3) If a director of a society- (a) Fails to take all reasonable steps to ensure compliance by the society with this section; or (b) Has by his own wilful act been the cause of any default by the society thereunderhe commits an offence and shall be liable to imprisonment for a term not exceeding six months or to a fine not exceeding two hundred pounds, or to both. (4) It shall be a defence to a charge of an offence against paragraph (a) of subsection (3) of this section to prove that the person charged had reasonable grounds to believe, and did believe, that a competent and reliable person was charged with the duty of seeing that the requirements of this section were complied with and was in a position to discharge that duty. Cf. Building Societies Act 1962, ss. 76 (3) - (5), 79 (1) (U.K.) Accounts and Audit 90. Accounts-( 1) Every society shall- (a) Cause to be kept proper books of account with respect to its transactions and its assets and liabilities; and (b) Establish and maintain a system of control and inspection of its books of account and a system for

64 1965, No. 22 Building Societies 239 supervising its cash holdings and all receipts and remittances. (2) For the purposes of this section, proper books of account shall not be taken to be kept with respect to the matters mentioned in paragraph (a) of subsection (1) of this section if there are not kept such books as are necessary to give a true and fair view of the state of the affairs of the society and to explain its transactions. Cf. 1908, No. 18, s. 44 (1) ; Building Societies Act 1962, s. 76 (1), (2) (U.K.) 91. Revenue and appropriation account and balance sheet-( 1) The directors of every society shall lay before the society at the annual general meeting- ( a) A revenue and appropriation account for the last financial year that ended before the date of the annual general meeting; and (b) A balance sheet as at the end of that financial year. (2) In the case of a terminating society whose shares are divided into groups, this section shall be read subject to section 102 of this Act. Cf. 1908, No. 18, s. 44 (1) ; Building Societies Act 1962, s.77 (1) (U.K.) 92. Contents and form of accounts-( 1) Every such balance sheet shall give a true and fair view of the state of the society's affairs as at the end of its financial year. (2) Every such revenue and appropriation account shall give a true and fair view of the society's income and expenditure for the financial year. (3) Without prejudice to the general requirements of this section or to any other requirements of this Act, every such balance sheet and account shall be in such form and contain such particulars as maybe prescribed. Cf. 1908, No. 18, s. 44 (1); 1930, No. 40, s. 61; 1932, No. 8, s. 52; 1932, No. 30, s. 32' (4) (d); Building Societies Act 1962, s. 78 (1) -(3), (5) (U.K.) 93. Offences under sections 90 to 92-( 1) If a director of a society- (a) Fails to take all reasonable steps to comply or, as the case may require, to ensure compliance by the society, with the requirements of any of the provisions of sections 90 to 92 of this Act; or

65 240 Building Societies 1965, No. 22 (b) Has by his own wilful act been the cause of any default by the society under any such provisionhe commits an offence and shall be liable to imprisonment for a term not exceeding six months or to a fine not exceeding two hundred pounds, or to both. (2) In any proceedings against any person in respect of an offence against paragraph (a) of subsection (1) of this section, it shall be a defence to prove that the person charged had reasonable grounds to believe, and did believe, that a competent and reliable person was charged with the duty of seeing that the requirements of the provision in question were complied with and was in a position to discharge that duty. Cf. Building Societies Act 1962, ss. 76 (5), 77 (2), 78 (4),79 (1), (3) (U.K.) 94. Signing of balance sheet-( 1) Every balance sheet of a society shall be signed on behalf of the board of directors by two of the directors, and by the manager or secretary of the society. (2) If a balance sheet has not been so signed and a copy of it is issued, circulated, or published, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. Building Societies Act 1962, s. 80 (U.K.) 95. Account and 'auditors' report to be annexed to balance sheet-( 1) The revenue and appropriation account shall be annexed to the balance sheet, and the auditors' report shall be attached to it. (2) The account so annexed shall be approved by the board of directors of the society before the balance sheet is signed on their behalf. (3) If any copy of a balance sheet is issued, circulated, or published without having annexed to it a copy of such account as aforesaid, or without having attached to it a copy of the auditors' report, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf No. 18, s. 44 (2) ; Building Societies Act 1962, s.81 (U.K.) 96. Directors' report-( 1) The directors shall prepare for submission at the annual general meeting a report on the state of the affairs of the society.

66 1965, No. 22 Building Societies 241 (2) The directors' report shall include a statement setting out for the last financial year that ended before the date of the annual general meeting- ( a) The total amount advanced during the financial year by the society on the security of mortgages of land, and the total number of mortgages executed in favour of the society during that year: (b) The proportion of the total amount. so advanced by the society which represents special advances, and the number of mortgages executed during the financial year to secure special advances: ( c) The total amount advanced during the financial year by the society on the security of members' shares: (d) The total amount of money received during the financial year by way of investments in or loans to or deposits with the society from members or depositors, and the total amount of money paid out by the society by way of repayment of the principal value of shares in the society, or by way of repayment of sums lent to or deposited with the society: (e) The number of cases in which, at the end of the financial year, a mortgagor or borrower was in arrears with payments due to the society under his mortgage or other security on account of principal and interest to an amount which exceeded the amount that fell due under the mortgage or other security on account of principal and interest in the financial year: (f) The total of the amounts of the arrears at the end of the financial year in all the cases falling within paragraph (e) of this subsection. (3) The directors' report shall be attached to the balance sheet. ( 4) If any copy of a balance sheet is issued, circulated, or published without having attached to it a copy of the directors' report, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. Building Societies Act 1962, s. 82 (U.K.) 97. Right to receive copies of accounts and reports (1) A copy of the balance sheet, including every document required by law to be annexed to it, which is to be laid before a society at the annual general meeting, together with a copy of the auditors' report and of the directors'

67 242 Building Societies 1965, No. 22 report, shall, not less than fourteen days before the date of the meeting, be sent to every member of the society. (2) Two copies of every such balance sheet and document as aforesaid, each being certified both by a director and the manager or secretary of the society to be a true copy, shall at the same time be sent to the Registrar, who shall thereupon send one such copy to the appropriate District Registrar of Companies.. (3) Every depositor in a society shall be entitled, on demand and without charge, to be furnished with a copy of the last balance sheet of the society and of every such document and report as aforesaid; but no depositor shall be entitled to more than one copy of any such balance sheet, document, or report in respect of anyone financial year. ( 4) If default is made- (a) In complying with subsection (1) or subsection (2) of this section; or (b) In furnishing to any depositor, within seven days after a demand is made under subsection (3) of this section, a copy of any balance sheet, document, or report with which he is entitled to be so furnishedthe society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. 1908, No. 18, s. 45; 1955, No. 97, s. 5 (e); Building Societies Act 1962, s. 83 (U.K.) 98. Appointment of auditors-( 1) Every society shall at each annual general meeting appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting. (2) The appointment of a partnership by the firm name to be the auditors of a society shall be taken to be the appointment of all the persons who are partners in the firm at the time of the appointment. (3) At any annual general meeting a retiring auditor, however appointed, shall be reappointed without any resolution being passed unless- (a) He is not qualified for reappointment; or (b) A resolution has been passed at that meeting appointing somebody instead of him or providing expressly that he shall not be reappointed; or ( c) He has given to the society notice in writing of his unwillingness to be reappointed: Provided that where notice is given of an intended resolution to appoint some person or persons in place of a retiring

68 1965, No. 22 Building Societies 243 auditor, and by reason of the death, incapacity, or disqualification of that person or of those persons, as the case may be, the resolution cannot be proceeded with, the retiring auditor shall not be automatically reappointed by virtue of this subsection. ( 4) With respect to the first auditors of a society, the following provisions shall apply: ( a) They may be appointed by the directors at any time before the first annual general meeting; and, subject to paragraph (b) of this subsection, auditors so appointed shall hold office until the conclusion of tha t meeting: (b) Subject to section 99 of this Act, the society may at a general meeting remove any auditors so appointed, and appoint in their place any other persons who have been nominated for appointment by any member of the society and of whose nomination notice has been given to the members of the society not less than fourteen days before the date of the meeting: ( c) If the directors fail to exercise their powers under paragraph ( a) of this subsection, the society in general meeting may appoint the first auditors, and thereupon the said powers of the directors shall cease. (5) The directors may fill any casual vacancy in the office of auditor; but while any such vacancy continues the surviving or continuing auditor or auditors, if any, may act. Cf. Building Societies Act 1962, s. 84 (U.K.) 99. Resolutions as to appointment and removal of auditors-( 1) A resolution at a society's annual general meeting- (a) Appointing as auditor a person other than a retiring auditor; or (b) Providing expressly that a retiring auditor shall not be reappointedshall not be effective unless notice of the intention to move it has been given to the society not less than twenty-eight days before the meeting at which it is moved: Provided that if, after notice of the intention to move such a resolution has been given to the society, the annual general meeting is cahed for a date less than twenty-eight days after the notice has been given, the notice, though not given within the time required by this subsection, shah be taken to have been so given.

69 244 Building Societies 1965, No. 22 (2) A society shall give to its members notice of any such resolution at the same time and in the same manner as it gives notice of the meeting, or, if that is not practicable, shall give them notice of the resolution, not less than twenty-one days before the meeting, either by advertisement in a newspaper having an appropriate circulation or in any other way allowed by the society's rules. (3) On receipt by a society of notice given under subsection (1) of this section of an intended resolution, the society shall forthwith send a copy of the notice to the retiring auditor (if any). (4) Subject to subsection (5) of this section, where such a notice is given, and the retiring auditor makes representations in writing to the society (not exceeding a reasonable length) with respect to the intended resolution, and requests that those representations be notified to members of the society, the society shall, unless the representations are received too late for it to do so,- ( a) In any notice of the resolution given to members, state the fact of the representations having been made; and (b) Send a copy of the representations to every member to whom notice of the meeting is sent ( whether before or after receipt of the representations by the society)- and if a copy of the representations is not so sent either because they were received too late or because of the society's default, the auditor (without prejudice to his right to be heard orally) may require that they be read out at the meeting. (5) Copies of any such representations need not be sent out, and they need not be read out at the meeting, if, on the application either of the society or of any other person who claims to be aggrieved, the Supreme Court or a Judge thereof is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter; and the Court or Judge may order the society's costs on any such application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application. (6) Subsections (4) and (5) of this section shall apply in relation to a resolution to remove the first auditors of a society, by virtue of subsection (4) of section 98 of this Act, as they apply in relation to a resolution that a retiring auditor shall not be reappointed. Cf. Building Societies Act 1962, ~. 85 (U.K.)

70 1965, No. 22 Building Societies Disqualifications for appointment as auditor (1) Subject to subsection (2) of this section, no person shall be qualified for appointment as auditor of a society unless he is- (a) A member of the New Zealand Society of Accountants; or (b) A member, fellow, or associate of an association of accountants constituted in some part of the Commonwealth outside New Zealand, and for the time being approved for the purpose of the audit of company accounts under subsection (4) of section 165 of the Companies Act (2) Nothing in subsection (1) of this section shall disqualify any person appointed as auditor of a society before the commencement of this Act from acting as auditor of that society, or from being at any time and from time to time reappointed as auditor thereof. (3) None of the following persons shall be qualified for appointment as auditor of a society: ( a) An officer or servant of the society: (b) A person who is a partner of or in the employment of an officer or servant of the society: (c) A body corporate. (4) References in this section to an officer or servant shall be construed as not including references to an auditor. ( 5) Subsections (1) and (3) of this section shall have effect notwithstanding anything in the rules of any society. (6) Any unqualified person who acts as auditor of a society commits an offence against this Act. (7) If a society appoints any unqualified person to be an auditor- (a) The appointment shall be void, and the Registrar may appoint a qualified person to fill the vacancy: (b) The society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. Building Societies Act 1962, s. 86 (U.K.) 101. Auditors' report, right of access to books, and right to attend meetings-( 1) The auditors of a society shall make a report to the members on the accounts examined by them, and on every balance sheet and every revenue and appropriation account laid before the society at the annual general meeting during their tenure of office. (2) The auditors' report shall be read before the society at the annual general meeting and shall be open to inspection by any member.

71 246 Building Societies 1965, No. 22 (3) The report shall state whether the balance sheet and revenue and appropriation account are properly drawn up in accordance with the requirements of this Act and the regulations made thereunder, and whether, in the opinion of the auditors, they give a true and fair view- (a) In the case of the balance sheet, of the state of the society's affairs as at the end of its financial year; and (b) In the case of the revenue and appropriation account, of the society's income and expenditure for its financial year. (4) It shall be the duty of the auditors, in preparing the report, to carry out such investigations as will enable them to form an opinion as to the following matters: (a) Whether the society has kept proper books of account and proper records of the matters referred to in subsection (1) of section 42 of this Act: (b) Whether the society has maintained a satisfactory f>ystem of control over its transactions and records, and in particular whether the requirements of sub Jection (1) of section 89 and paragraph (b) of subsection (1) of section 90 of this Act have been complied with: ( c) Whether the balance sheet and revenue and appropriation account are in agreement with the books of account and records of the societyand if the auditors are of opinion that the society has failed in respect of any of the aforesaid matters, or if the balance sheet and revenue and appropriation account are not in agreement with such books and records as aforesaid, the auditors shall state that fact in the report. (5) Every auditor of a society- (a) Shall have a right of access at all times to the books, accounts, and vouchers of the society, and to all other documents relating to its affairs, including the instruments relating to property mortgaged to the society; and (b) Shall be entitled to require from the society's officers such information and explanations as he thinks necessary for the performance of the auditors' duties. (6) If the auditors fail to obtain all the information and explanations which, to the best of their knowledge and belief, are necessary for the purposes of their audit, they shall state that fact in their report.

72 1965, No. 22 Building Societies 247 (7) The auditors of a society shall be entitled- (a) To attend any general meeting of the society, and to receive notices of and other communications relating to any general meeting which any member of the society is entitled to receive; and (b) To be heard at any meeting which they attend on any part of the business of the meeting which concerns them as auditors. Cf. Building Societies Act 1962, s. 87 (U.K.) 102. Accounts of groups in terminating society-( 1) Where the shares of a terminating society are divided into groups, the directors of the society shall lay before the society at the annual general meeting, in addition to the revenue and appropriation account and balance sheet referred to in section 91 of this Act, a like revenue and appropriation account and balance sheet in respect of each such group. (2) Subject to the provisions of this section, the provisions of sections 92 to 95, subsection (2) of section 97, and section 101 of this Act, with all necessary modifications, shall apply to every group account and balance sheet required by this section to be laid before the annual general meeting. (3 ) For the purposes of sections 95 and 10 1 of this Act (as applied by this section)- (a) It shall not be necessary for the auditors' report on each group account and balance sheet to be attached to that balance sheet or to be read before the society at the annual general meeting, if the auditors' report attached to the society's balance sheet includes a report on all group accounts and balance sheets: (b) Where in the auditors' opinion any group account and balance sheet are not properly drawn up or do not give a true and fair view of the affairs, income, and expenditure of the group, or are not in agreement with the books and records of the society, the auditors shall state that fact in their report attached to the society's balance sheet as well as in their report on the group account and balance sheet. ( 4) Any member of any group in a terminating society shall be entitled, on demand and without charge, to be furnished with a copy of the last revenue and appropriation account and balance sheet relating to that group and, on payment to the society of a fee not exceeding one pound, with copies of the last such accounts and balance sheets relating to all other groups; but no such member shall be entitled to more

73 248 Building Societies 1965, No. 22 than one copy of any such account and balance sheet in respect of anyone financial year. (5) If default is made in furnishing to any such member, within one month after a demand is made under subsection ( 4) of this section, a copy of any account or balance sheet with which he is entitled to be so furnished, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. 1908, No. 18, s. 45; 1955, No. 97, s. 5 (e); Building Societies Act 1962, s. 87 (U.K.) Annual Return 103. Duty to make annual return-( 1) Every society shall, in the first three months of each financial year, make to the Registrar, in duplicate, a return relating to its affairs for the previous financial year: Provided that a society need not make a return under this subsection in the financial year in which it is incorporated. (2) The annual return shall contain such information and be in such form as may be prescribed, and each copy sent to the Registrar shall be signed by two of the directors and by the manager or secretary of the society. (3) The Registrar shall send one such copy to the appropriate District Registrar of Companies. ( 4) If a society fails to comply with any of the provisions of this section or of any regulations made for the purposes thereof, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. 1908, No. 18, ss. 44, 45; Building Societies Act 1962, s.88 (1)-(3), (5), (6) (U.K.) 104. Annual return to disclose advances to certain officers or companies-( 1) The annual return shall also contain particulars showing the amount of any advances made by the society during the relevant financial year- (a) To any director or the manager or secretary of the society; or (b) To any person who, after the making of the advance, became a director or the manager or secretary of the society; or (c) To a company or other body corporate in which, when the advance was made, or at any later time in the

74 1965, No. 22 Building Societies 249 relevant financial year, a director or the manager or secretary of the society held (either directly or through a nominee) shares whose nominal value exceeded two and a half per cent of the total paidup share capital of the company or other body corporate; or (d) To a company or other body corporate of which, when the advance was made, or at any later time in the relevant financial year, a director or the manager or secretary of the society was a director, general manager, secretary, or other similar officer. (2) The annual return shall also contain particulars showing- (a) The total amount of advances made by the society during the relevant financial year to employees under paragraph (e) of subsection (1) of section 55 of this Act; and (b) The total amount of advances made by the society during that year to employees under paragraph (f) of that subsection. (3) It shall be the duty of every director and of the manager and the secretary of a society to give notice in writing to the society of such matters relating to his employment by or other interest in any company or other body corporate as may be necessary for the purposes of subsection (1) of this section; and, subject to subsection (4) of this section, a person who fails to comply with this subsection commits an offence against this Act. ( 4) In any proceedings against a person in respect of an offence against subsection (3) of this section, it shall be a defence to prove that at the time of the alleged offence he did not know that the society had made an advance to the body corporate in question, and that at that time reasonable arrangements were in operation to bring to his notice any advance made by the society to any body corporate. (5) If the requirements of subsection (1) or subsection (2) of this section are not complied with, it shall be the duty of the society's auditors to include in their report, so far as they are reasonably able to do so, a statement giving the required particulars. (6) In this section, the expression "the relevant financial year" means the financial year to which the annual return relates. Cf. Building Societies Act 1962, s. 89 (U.K.)

75 250 Building Societies 1965, No Additional annual return of certain transactions ( 1) For every financial year for which the annual return is made by a society, the society shall cause to be prepared, and sent to the Registrar together with the annual return, an additional return, in duplicate, in respect of- (a) Every property that has, during that financial year, been sold by the society in the exercise of its powers as mortgagee; and (b) Every mortgage that has been transferred by the society during that financial year. (2) The provisions of subsections (2) and (3) of section 103 of this Act shall apply to such additional return as they apply to the annual return. (3) A person who has effected a mortgage in favour of a society, and any person to whom there have passed, whether by operation of law or otherwise, any of the rights or liabilities under such a mortgage of the person who effected it, shall be entitled to be furnished by the appropriate District Registrar of Companies with a copy of so much of such additional return as relates to that mortgage. ( 4) Except as provided by subsection (3) of this section, no person shall be entitled to require a District Registrar of Companies to permit him to inspect, or to furnish him with any extract from, any such return. ( 5) If a society fails to send any additional return as required by this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. Building Societies Act 1962, s. 90 (U.K.) 106. Auditors' report on annual return-( 1) The auditors of a society shall make a report on the annual return, and that report shall be annexed to the annual return made to the Registrar. (2) Without limiting the power to make regulations under section 137 of this Act, any such regulations may provide that the auditors of a society shall not be required, in their report on the annual return, to deal with such of the matters to be contained in the annual return as may be prescribed. (3) The auditors' report on the annual return shall, without prejudice to any provision of this Act requiring any other information to be contained therein, contain statements as to the following matters: ( a) Whether in their opinion the annual return is properly drawn up in accordance with this Act and any regulations made thereunder:

76 1965, No. 22 Building Societies 251 (b) Whether the annual return gives a true and fair view of the matters to which it is to be addressed, other than those with which the auditors, by virtue of regulations made under this Act, are not required to deal: ( c) Whether the annual return is in agreement with the books of account and records of the society. Cf. 1908, No. 18, s. 44 (2) ; Building Societies Act 1962, s.91 (U.K.) Liability of Officers 107. Officers and auditors not to be exempted from liability-( 1) This section applies to any provision for- ( a) Exempting any director or other officer of a society from any liability which, by virtue of any rule of law, would otherwise attach to him in respect of any negligence, default, breach of duty, or breach of trust of which he may be guilty in relation to the society; or (b) Indemnifying any such director or officer against any such liability. (2) Subject to the provisions of this section, any provision to which this section applies, whether the provision is in a society's rules or in any contract with a society or otherwise, shall be void. (3) In respect of anything done at any time before the expiry of a period of six months from the commencement of this Act, nothing in subsection (2) of this section shall deprive any person of any exemption or right to be indemnified by virtue of any such provision, if that provision was in force at the commencement of this Act. ( 4) This section shall not prevent a society from indemnifying a person against any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted. (5) Section 468 of the Companies Act 1955 (which empowers the Court to grant relief in certain cases of negligence, default, breach of duty, or breach of trust) shall apply in relation to directors and other officers of a society as it applies in relation to officers of a company. Cf. Building Societies Act 1962, ss. 92, 130, Eighth Schedule (para. 10) (U.K.)

77 252 Building Societies 1965, No. 22 Determination of Disputes 108. General provisions as to disputes-( 1) This section applies to any dispute between a society and a member thereof, or a representative of a member, in his capacity as a member, in respect of any matter except the construction or effect of- ( a) A mortgage instrument; or (b) Any other contract contained in any document other than the society's rules. (2) Sections 109 to 112 of this Act shall have effect in respect of disputes to which this section applies, but, except so far as a society's rules otherwise expressly provide, shall not have effect in respect of any other dispute. (3) Where the provisions of those sections have effect, and in accordance therewith a dispute is to be determined by arbitration or by the Registrar, no Court shall have jurisdic~ tion to determine it except so far as those provisions confer jurisdiction in that behalf. (4) Nothing in those sections shall prevent a society or any member thereof, or any person claiming through or under a member, from obtaining in the ordinary course of 'law any remedy in respect of any mortgage or in respect of any other contract, other than the society's rules, to which he or the society would otherwise be entitled by law. (5) Any reference in a society's rules to disputes shall, except so far as the rules otherwise expressly provide, be con~ strued as referring, and as referring only, to disputes to which this section applies. Cf. 1908, No. 18, s. 2 (2); Building Societies Act 1962, s.93 (U.K.) 109. Determmation of disputes by arbitration-( 1) This section shah have effect where a society's rules direct that disputes shall be referred to arbitration. (2) AI1bitrators shall be nominated and e'lected in the manner provided by the rules or, if the rules make no such provision, at the first general meeting of the society. (3) No al'bitrators shall be beneficially interested, whether directly or indirectly, in the funds of a society. (4) In the case of each dispute such number of the arbitrators, not being less than three, as may be prescribed by the society's rules shall be chosen by ballot, in such manner as may be so prescribed, to determine it. (5) The names of the arbitrators shall be duly entered in the society's minute book.

78 1965, No. 22 Building Societies 253 (6) If an arbitrator dies, or refuses or neglects to act, the society at a general meeting shall nominate and elect another to act in his place. (7) The award made by the arbitrators or the majority of them, if made in accordance with the society's rules, shall determine the dispute. (8) If either party to a dispute refuses or neglects to comply with the award within such time as may be limited by the award, the Court, on the application of any person concerned, shall enforce compliance with the award on proof of its having been made and of that party's refusal or neglect to comply with it. Cf. 1908, No. 18, ss ; Building Societies Act 1962, s.94 (U.K.) 110. Determination of disputes by Registrar-( 1) A dispute shall be referred to the Registrar- (a) Where the parties to it agree so to refer it; or (b) Where the society's rules direct that disputes be so referred; or (c) Where it is a dispute as to the rights of a member under section 75 of this Act. (2) Any reference of a dispute to the Registrar under this section shall be deemed to be a reference to al1bitration. (3) The award of the Registrar on any dispute referred to him shall have the same effect as that of arbitrators under section 109 of this Act. Cf. 1908, No. 18, ss. 38, 40 (1); Building Societies Act 1962, s. 95 (U.K.) 111. Determination of disputes by Court-The Court may hear and determine a dispute in any case where- (a) The society's rules direct that disputes shah be referred to the Court or to Justices; or (b) It appears to the Court, on the application of any person concerned, that either party to the dispute has applied to the other party for the purpose of having the dispute settled by arbitration under the society's rules, and that either the last-mentioned application has not been complied with within forty days or the arbitrators have refused, or have neglected for a period of twenty-one days, to make an award. Cf. 1908, No. 18, s. 39; Building Societies Act 1962, s. 96 (U.K.)

79 254 Building Societies 1965, No Effect of determination-subject to section 113 of this Act, every determination of a dispute by arbitrators, or by the Registrar, or by the Court, shall be final and conclusive and binding on all parties, and shall not be subject to appeal; and no proceedings on or determination of a dispute, whether referred to arbitrators, the Registrar, or the Court, shall be removed into or restrained by injunction granted by any Court. Cf. 1908, No. 18, s. 40 (1); Building Societies Act 1962, s. 97 (U.K.) 113. Statement of case for Supreme Court-( 1) At the request of either party to the dispute, the arbitrators, or the Registrar where the dispute is referred to him, or the Magistrate where a Magistrate's Court is hearing the dispute, may state a case for the opinion of the Supreme Court on any question of law. (2) Section 11 of the Arbitration Amendment Act 1938 (which enables arbitrators to state, or to be directed to state, a special case for decision by the Supreme Court) shall not apply to any dispute that is so referred. Cf. 1908, No. 18, s. 40 (1); Building Societies Act 1962, s.98 (U.K.) PART VIII DISSOLUTION AND WINDING Up 114. Dissolution in accordance with rules-a society may be dissolved in the manner prescribed by its rules. Cf. 1908, No. 18, s. 33 (1) (b); Building Societies Act 1962, s. 99 (U.K.) 115. Dissolution by consent-( 1) A society may be dissolved by an instrument of dissolution, with the consent of three-fourths of the members, holding not less than twothirds of the number of shares in the society, testified by their signatures to the instrument of dissolution. (2) The instrument of dissolution shall set out- (a) The liabilities and assets of the society, in detail: (b) The number of members, and the amount standing to their credit in the society's books: ( c) The claims of depositors and other creditors, and the provision to be made for their payment: ( d) The intended appropriation or division of the funds and property of the society:

80 1965, No. 22 Building Societies 255 ( e) The names of one or more persons to be appointed as trustees for the purposes of the dissolution, and their remuneration. (3) Alterations in the instrument of dissolution may be made with the like consent, testified in the same manner. ( 4) The instrument of dissolution, and all alterations therein, shall be registered in the manner provided by this Act for the registration of rules, and shall be binding on all the members of the society. Cf. 1908, No. 18, s. 33 (1) (c); Building Societies Act 1962, s. 100 (U.K.) 116. Provisions as to dissolution under last two preceding sections-( 1) The provisions of this section shall have effect in relation to the dissolution of a society under section 114 or section 115 of this Act. (2) The provisions of this Act shall continue to apply in relation to the society as if the liquidators or other persons conducting its dissolution, or, as the case may be, the trustees appointed under the instrument of dissolution, were the board of directors of the society. (3) Such liquidators, trustees, or other persons as aforesaid shall, within twenty-eight days from the termination of the dissolution, send to the Registrar, in duplicate, an account and balance sheet signed and certified by them as correct, and showing the assets and liabilities of the society at the commencement of the dissolution and the way in which those assets and liabilities have been applied and discharged; and if they fail to do so each of them shall be guilty of an offence and shall be liable to a fine not exceeding five pounds for every day during which the default has continued. ( 4) The Registrar shall send one copy of the account and balance sheet to the appropriate District Registrar of Companies. ( 5) Except with the consent of the Registrar- (a) No resolution, instrument of dissolution, or other proceeding for the dissolution of a society; and (b) No alteration of an instrument of dissolutionshall be of any effect if the purpose of the proposed dissolution is to effect or facilitate the transfer of the society's engagements to any other society. (6) Any provision in a resolution or document that members of a society proposed to be dissolved shall accept investments in another society, whether in shares, deposits, or

81 256 Building Societies 1965, No. 22 any other form, in or towards satisfaction of their rights in the dissolution shall be conclusive evidence of such a purpose as is mentioned in subsection (5) of this section. Cf. Building Societies Act 1962, s. 102 (U.K.) 117. Dissolution on award of Registrar-( 1) On the application in writing of not less than- (a) One hundred members in the case of a society that has more than one thousand members; or (b) One-tenth of the whole number of members in the case of any other societystating that the society is unable to meet the claims of its members and that it would be for their benefit that it should be dissolved, and requesting an investigation into the society's affairs with a view to its being dissolved, the Registrar may investigate the society's affairs. (2) Before beginning any such investigation the Registrar shall give not less than two months' notice in writing to the society stating his intention to make an investigation under this section. (3) The Registrar shall consider any representations with respect to the investigation that may be made to him by the society within the said period of two months or such further period as he may allow, and, if the society so requests, shall afford to it an opportunity of being heard by him within such period or further period as aforesaid. (4) If on such an investigation it appears to the Registrar that the society is unable to meet the claims of its members and that it would be for their benefit that it should be dissolved, the Registrar may, if he thinks fit, direct that the society be dissolved. (5) The Registrar may, if he thinks fit, suspend any such direction for such period as he thinks necessary to enable the society to make such alterations of its rules as will in his opinion make the direction unnecessary; and if such alterations as aforesaid are duly made and the Registrar is of opinion that the direction has become unnecessary he shall cancel it accordingly. (6) The Registrar shall give public notice of any such direction, and of any suspension or cancellation of any such direction; and shall also give notice thereof to the appropriate District Registrar of Companies. (7) Where any such direction is given, the Registrar shall also give such directions as he thinks fit as to the manner in which the society's affairs are to be wound up. C. Building Societies Act 1962, s. 101 (U.K.)

82 1965, No. 22 Building Societies 257 lib. Dissolution by winding up by or under supervision of Court-( 1) The foregoing provisions of this Part of this Act shall have effect without prejudice to the operation of this section or of any other enactment under which societies can be wound up. (2) A society may be dissolved by winding up, either voluntarily subject to the supervision of the Court or by the Court, if the Court so orders, on the petition of any member authorised by special resolution to present the petition on behalf of the society. (3) A society may be dissolved by winding up by the Court, if the Court so orders, on the petition of any judgment creditor for a sum exceeding fifty pounds. ( 4) A society may be dissolved by winding up by the Court, if the Court so orders, on the petition of the Registrar acting in the exercise of any power conferred on him by any provision of this Act. (5) Subject to the provisions of this Act and of any regulations made thereunder, a society shall be deemed for the purposes of any winding up under this section to be a company, and the provisions of the Companies Act 1955 relating to the winding up of companies, so far as they are applicable and with the necessary modifications, shall apply accordingly. ( 6) Where in the exercise of any power conferred by this Act the Registrar presents a petition for the winding up of a society under the Companies Act 1955, the Court may, if it thinks fit, having regard to the interests of those members of the society (if any) who were not responsible for the relevant default, and to all the other circumstances, refuse to make an order for winding up, and may make its refusal subject to any conditions. (7) The conditions that the Court may impose under subsection (6) of this section, or under section 250 of the Companies Act 1955 (which authorises the Court to stay proceedings after the making of an order for winding up), may include conditions for ensuring- ( a) That the society be dissolved under section 114 or section 115 of this Act; or (h) That the society unite under section 32 of this Act with another society, or that it transfer its engagements to another society under section 33 of this Actand may also include conditions for ensuring that the relevant default be made good, and that the costs of the proceedings on the petition be defrayed by the person or persons responsible for that default. AlD

83 258 Building Societies 1965, No. 22 (8) In this section, the expression "the relevant default", in relation to a petition for winding up, means the default that was the occasion of the petition being presented. Cf. 1908, No. 18, s. 33 (1) ( d) ; Building Societies Act 1894, s. 8 (U.K.); Building Societies Act 1962, s. 103 (U.K.) 119. Liability of members on dissolution or winding up Where a society is being dissolved or wound up, a member to whom an advance has been made under a mortgage or other security, or under the rules of the society, shall not be liable to pay the amount payable thereunder except at the time or times and subject to the conditions set out in the mortgage or other security, or in the rules, as the case may be. Cf. Building Societies Act 1962, s. 104 (U.K.) 120. Notice of dissolution or winding up-( 1) Notice of the commencement and of the termination of the dissolution or winding up of a society shall be sent, in duplicate, to the Registrar, and one copy shall be registered by him. (2) The Registrar shall send the remaining copy to the appropriate District Registrar of Companies. (3) If a society fails to send any such notice as aforesaid, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. 1908, No. 18, s. 33 (3); Building Societies Act 1962, s. 105 (U.K.) 121. Provision as to terminating societies-in relation to a terminating society, the provisions of this Part of this Act shall have effect without prejudice to the termination of the society on the happening of any event on which the society is to terminate. Cf. 1908, No. 18, s. 33 (1) ( a) ; Building Societies Act 1962, s. 106 (U.K.) PART IX MISCELLANEOUS PROVISIONS 122. General control of advertisements-( 1) Without limiting the power to make regulations conferred by section 137 of this Act, the Governor-General may from time to time, by Order in Council, make regulations with respect to the matter and form of any kinds of- ( a) Advertisements; or

84 1965, No. 22 Building Societies 259 (b) Invitations, whether or not addressed to particular persons, to invest in or lend money to a societythat a society may issue or cause to be issued. (2) Without limiting the generality of subsection (1) of this section, any such regulations may- (a) Require that in any specified kinds of advertisements, or of invitations to invest in or lend money to a society, there shall be included a statement in the prescribed form concerning the general financial position of the society or giving any particular information with respect to its affairs: (b) Require a society to take the prescribed steps to withdraw advertisements which are on display in public places and which do not comply with the requirements of the regulations. (3) Any such regulations may- (a) Make different provision for different cases: (b) Contain such transitional, supplementary, and incidental provisions as may be reasonably necessary. ( 4) If a society contravenes any provision of any such regulations, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. (5) If any officer or servant of a society contravenes any provision of any such regulations he shall be guilty of an offence against this Act. Cf. Building Societies Act 1962, s. 57 (U.K.) 123. Inspections 'and special meetings-( 1) On the application of the requisite number of members of a society, or, where no such application has been made but the Registrar is of opinion that an investigation should be held into a society's affairs or that its affairs call for consideration by a meeting of the members, the Registrar may- (a) Appoint an inspector to inquire into and report on the society's affairs; or (b) Call a special meeting of the society; or ( c) Either on the same or on different occasions, both appoint such an inspector and call such a meeting. (2) For the purposes of subsection (1) of this section, -the requisite number of members is- ( a) One hundred in the case of a society that has more than one thousand members; and (b) One-tenth of the whole number of members in the case of any other society. AIO*

85 260 Building Societies 1965, No. 22 (3) Where such an application is made by the requisite number of members, the following provisions shall apply: (a) The application shall be supported by such evidence as the Registrar may direct for the purpose of showing that the applicants have good reason for requiring an inspection or a special meeting, as the case may be, and that they are not actuated by malicious motives in making the application: (b) Such notice of the application shah be given to the society by the applicants or one or more of them as the Registrar may direct: ( c) The Registrar shall require the applicants to give secur ity for the costs of the proposed inspection or meet ing before the inspector is appointed or the meet ing is called: ( d) All expenses of and incidental to the inspection or meet ing shall be defrayed by the applicants, or out of the funds of the society, or by the members or officers or former members or officers of the society, in such proportions as the Registrar may direct. ( 4) Before exercising his powers under subsection (1) of this section in a case where no such application is made, the Registrar shall- (a) Give to the society not less than fourteen days' notice in writing of the action he proposes to take, speci fying briefly the grounds on which he proposes to take it; and (b) Consider any representations with respect to the pro posed action that may be made to him by the society within the period of the notice or such further period as he may allow, and, if the society so requests, afford to it an opportunity of being heard by him within such period or further period as aforesaid. (5) An inspector appointed under this section may require the production of all or any of the books, accounts, securities, and documents of the society, and may examine on oath any of its officers, members, agents, and servants, and may administer an oath accordingly. (6) Notwithstanding anything in the rules of a society, where a special meeting is called under this section- (a) The Registrar may direct at what time and place the meeting is to be held, and what matters are to be discussed and determined at the meeting, and may give such other directions as he thinks fit with

86 1965, No. 22 Building Societies 261 respect to the calling, holding, and conduct of the meeting: (b) The Registrar may appoint a person to be chairman at the meeting; and if he does not do so the meeting may appoint its own chairman: ( c) The meeting shall have all the powers of a meeting called according to the society's rules. (7) If a society fails to allow an inspector appointed under this section to do anything that he is authorised to do thereunder, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. Building Societies Act 1962, s. 110 (U.K.) 124. Compulsory cancellation or suspension of registration-( 1) Subject to the provisions of this section, the Registrar, with the approval of the Minister, may cancel or suspend the registration of a society if he is satisfied- (a) That a certificate of incorporation has been obtained for the society by fraud or mistake; or (b) That the society exists for an illegal purpose; or ( c) That the society has wilfully, and after notice from the Registrar, contravened any of the provisions of this Act; or ( d) That the society has ceased to exist. (2) Any cancellation or suspension of registration under this section shall be effected in writing signed by the Registrar. (3) Where the registration of a society is suspended under this section, the period of suspension shall in the first instance be a period not exceeding three months, but may, with the approval of the Minister, be extended from time to time by not more than three months at a time. (4) Before cancelling or suspending the registration of a society under this section, the Registrar shall give to the society not less than two months' notice in writing, specifying briefly the grounds of the proposed cancellation or suspension. (5) The Registrar shall consider any representations with respect to the proposed cancellation or suspension that may be made to him by the society within the said period of two 'months or such further period as he may allow, and, if the society so requests, shall afford to it an opportunity of being heard by him within such period or further period as aforesaid. (6) The Registrar shall give public notice of any cancellation or suspension, or any extension of a suspension, under this section, and shall also notify the appropriate District Registrar of Companies.

87 262 Building Societies 1965, No. 22 (7) Where under this section the registration of a society is cancelled, or is suspended for a period exceeding six months, the society may appeal to the Supreme Court or a Judge thereof; and on any such appeal the Court or Judge, if it or he thinks fit just to do so, may set aside the cancellation or suspension. Cf. Building Societies Act 1962, s. 113 (U.K.) 125. Cancellation of registration at request of society Without prejudice to section 124 of this Act, the Registrar may, if he thinks fit, cancel the registration of a society at the society's request, evidenced in such manner as the Registrar may direct. Cf. Building Societies Act 1962, s. 114 (U.K.) 126. Effect of cancellation or suspension of registration (1) Subject to the provisions of this section and to the right of appeal under section 124 of this Act, where the registration of a society is cancelled or suspended under that section, or is cancelled under section 125 of this Act, the society shall, as from the time of the cancellation or suspension and, in the case of a suspension, so long as the suspension continues, cease to enjoy the privileges of a society under this Act. (2) This section shall have effect in relation to a society without prejudice to any liability actually incurred by it; and any such liability may be enforced against it as if the cancellation or suspension had not taken place. Cf. Building Societies Act 1962, s. 115 (U.K.) 127. Provisions as to shares held jointly-( 1) This section shall have effect where shares in a society are held by two or more persons jointly; and in this section the expression "senior joint holder", in relation to any shares so held, means such one of the joint holders as is named first in the society's books. (2) The.ioint holders of any shares shall be entitled to choose the order in which they are named in the society's books. (3) Except where the society's rules otherwise provide, any notice or other document may be given or sent by the society to the joint holders by being given or sent to the senior joint holder: Provided that this subsection shall not prevent any of the joint holders from exercising the right under this Act of a member of a society to abtain from it on demand a copy of the balance sheet or of the annual return.

88 1965, No. 22 Building Societies 263 ( 4) For the purpose of determining who is qualified to vote, whether in person or by proxy, on a resolution at a meeting of the society, and of determining (where relevant) the number of votes any person may then give, the shares sha:ll be treated as being held by the senior joint holder alone; and accordingly a person who is a member of the society by reason only of being a joint holder of those shares, other than the senior joint holder, shall not be qualified to vote on any such resolution. (5) For the purposes of sections 32, 33, and 115 of this Act, the shares shall be treated as being held by the senior joint holder alone; and accordingly a person who is a member of the society by reason only of being a joint holder of those shares, other than the senior joint holder, shall not be regarded as a member of the society for the purposes of those sections. ( 6) The senior joint holder, but none of the other joint holders, shall have the right to join in making an application under section 117 or section 123 of this Act; and any reference in those sections to the total membership of a society shall be construed accordingly. (7) In the register to be maintained under section 74 of this Act, it shall not be necessary to enter the name and address of a person who is one of the joint holders, other than the senior joint holder, by reason only that he is a joint holder of those shares; and if his name and address are entered in the register in respect of those shares the entry shall indicate that he is a joint holder who is not the senior joint holder. Cf. Building Societies Act 1962, s. 116 (U.K.) 128. Land acquired by exercise of powers as mortgagee to be sold-( 1) Where a society becomes the owner of any land on the extinguishment of the right of redemption under any mortgage to the society, the land shall be sold as soon as may be reasonably practicable. (2) If a society fails to comply with this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. 1908, No. 18, s. 8; Building Societies Act 1962, s. 109 (U.K.) 129. Evidence of documents-( 1) Any document purporting to have been signed by the Registrar and to be a certificate of incorporation or registration or other document relating to a society shall be received in evidence in any Court and

89 264 Building Societies 1965, No. 22 by any person acting judicially and shah, in the absence of any evidence to the contrary, be deemed to have been signed by the Registrar. (2) A copy of or extract from any document kept at the office of any District Registrar of Companies pursuant to this Act, certified to be a true copy under the hand and seal of that District Registrar or an Assistant Registrar (whose official position and signature it shall not be necessary to prove), shall in all legal proceedings be admissible in evidence as of equal validity with the original document. (3) Any printed document purporting to be a copy of the rules of a society, and certified by the secretary or other officer of the society to be a true copy of its rules as registered, shall be received in evidence and shall, in the absence of any evidence to the contrary, be deemed to be a true copy of the rules. Cf. 1908, No. 18, s. 22; Building Societies Act 1962, s. 121 (U.K.) 130. Form in which records may be kept-( 1) Any register, record, or book of account to be kept by a society may be kept either by making entries in bound books or by recording the matters in question in any other manner. (2) Where any such register, record, or book of account is not kept by making records in a bound book but is kept by some other means, adequate precautions shall be taken for guarding against falsification and for facilitating its discovery. (3) Where default is made in complying with subsection (2) of this section, the society, and every officer of the society who is in default, shall be guilty of an offence against this Act. Cf. Building Societies Act 1962, s. 122 (U.K.) 131. Exemptions from stamp duties-no stamp duty shall be payable on- ( a) Any transfer of any share in a society: (b) Any bond or other security (other than a mortgage) to be given to or on account of the society or by any officer thereof: ( c) Any order on an officer of a building society for payment of money to any member: ( d) Any instrument appointing an agent of a society or revoking such an appointment: ( e) Any other instrument or document whatsoever (other than a mortgage) required or authorised to be given,

90 1965, No. 22 Building Societies 265 issued, signed, made, or produced pursuant to this Act or to the rules of a society. Cf. 1908, No. 18, s. 46; Building Societies Act 1962, s. 117 (U.K.) 132. Offences in relation to property of societies-( 1) Every person commits an offence who- ( a) By false representation or imposition obtains possession of any money, securities, books, papers, or other effects of a society; or (b) Having any of the same in his possession, withholds or misapplies them, or wilfully applies any part of them to purposes other than those authorised by the society's rules or by this Act. (2) Every person who commits an offence against this section shall be liable on conviction on indictment to imprisonment for a term not exceeding two years or to a fine not exceeding five hundred pounds, or to both. (3) The Court by which any person is convicted of an offence against this section may order him to deliver up or repay to the society any money, securities, books, papers, or other effects in respect of which he is so convicted. ( 4) An information in respect of an offence against this section may not be laid by a member of the society, unless he is authorised to do so by the society or the board of directors or the Registrar. Cf. 1908, No. 18, s. 32; Building Societies Act 1962, s. 111 (U.K.) 133. False statements in documents-( 1) If any person wilfully makes, or orders or allows to be made, any false statement in any document to which this section applies, or by erasure, omission, or otherwise wilfully falsifies any such document, he commits an offence and shall be liable on conviction on indictment to imprisonment for a term not exceeding two years or to a fine not exceeding five hundred pounds, or to both. (2) This section applies- (a) To any document sent to the Registrar under or pursuant to this Act; and (b) To any document consisting of a statement issued by a society pursuant to subsection (1) of section 34 of this Act. Cf. 1908, No. 18, s. 49 (11) (c); Building Societies Act 1962, s. 112 (U.K.)

91 266 Building Societies 1965, No Summary jurisdiction in respect of indictable offences-part II of the First Schedule to the Summary Proceedings Act 1957 is hereby amended in the manner indicated in the Fifth Schedule to this Act Offences punishable on summary conviction-( 1) Except where this Act otherwise provides, every offence against this Act, or against any regulations made under this Act, shall be punishable on summary conviction. (2) Notwithstanding anything in section 14 of the Summary Proceedings Act 1957, any information laid by the Registrar in respect of any offence against this Act to which that section applies may, subject to subsection (3) of this section, be laid at any time within one year beginning from the date on which evidence, sufficient in the opinion of the Registrar to justify a prosecution for the offence, comes to his knowledge. (3) Nothing in subsection (2) of this section shall authorise the laying of an information in respect of any such offence at a time more than three years after the date on which the offence was committed. Cf. Building Societies Act 1962, s. 120 (U.K.) 136. General penalty for offences-every society or person who commits an offence against this Act, or against any regulations made under this Act, for which no penalty is provided elsewhere than in this section is liable to a fine not exceeding five hundred pounds Regulations-The Governor-General may from time to time, by Order in Council, make regulations for all or any of the following purposes: ( a) Prescribing the forms of, and the particulars to be included in, applications, notices, certificates, returns, reports, or other documents made or issued under or for the purposes of this Act: (b) Prescribing the procedure to be followed in respect of applications to and proceedings before the Registrar: ( c) Prescribing fees to be paid to the Registrar in respect of the registration of rules, alterations in rules, and other documents and matters under this Act, the issue of certificates and other documents, and the exercise by the Registrar of any of his functions under this Act: ( d) Prescribing th~ pr?cedure for the institution, hearing, and determmahon of appeals under this Act:

92 1965, No. 22 Building Societies 267 ( e) Providing for the keeping of records by the Registrar for the purposes of this Act: (f) Providing the procedure for the giving or service of notices and documents under this Act: (g) Providing for such matters as are contemplated by or necessary for giving full effect to the provisions of this Act and for the due administration thereof. Cf. 1908, No. 18, s. 51; Building Societies Act 1962, s. 123 (U.K.) 138. Filing of rules of existing societies with District Registrars of Companies-( 1) It shall be the duty of the Registrar, as soon as practicable after the date of the commencement of this Act, to send a copy of the rules of every society existing at that date to the District Registrar of Companies whose office is nearest to the registered office of the society, or to 'such other District Registrar of Companies as may be approved for the purpose after consultation with the society. (2) For the purposes of this section the Registrar may require any such society to send to him not more than two copies of its rules. (3) If any such society fails to comply with any such requirement the society, and every officer of the society who is in default, shall be guilty of an offence against this Act Repeals, consequential amendments, and savings ( 1) The enactments specified in the Sixth Schedule to this Act are hereby repealed. (2) Section 51A of the National Expenditure Adjustment Act 1932 (as inserted by section 2 of the National Expenditure Adjustment Amendment Act 1960) is hereby amended by omitting the words "building society or", and also the words "building societies or". (3) Section 15 of the National Expenditure Adjustment Amendment Act 1932 is hereby amended by omitting from subsection (1), and also from subsection (2), the words "building society". (4) Section 4 of the Trustee Act 1956 is hereby amended by inserting in subsection (1), after paragraph (h), the following paragraph: "(hh) Subject to the provisions of section 63 of the Building Societies Act 1965, on deposit with any building society for the time being designated for the purposes of this section under the said section 63:".

93 268 Building Societies 1965, No. 22 (5) Every reference in any enactment or document to the Registrar of Building Societies under the Building Societies Act 1908, or to any District Registrar or Assistant Registrar of Building Societies under that Act shall hereafter, unless the context otherwise requires, be read as a reference to the Registrar of Building Societies under this Act. (6) Every reference in any enactment or document to the Deputy Registrar of Building Societies under the Building Societies Act 1908 shall hereafter, unless the context otherwise requires, be read as a reference to the Deputy Registrar of Building Societies under this Act. (7) For the purposes and without limiting the operation of the Acts Interpretation Act 1924, a resolution passed before the commencement of this Act in accordance with any of the provisions of the Building Societies Act 1908 shall be treated as a resolution that could have been passed under the corresponding provisions of this Act if it would have fallen to be so treated if passed after the commencement of this Act as a special resolution. (8) It shall be lawful for the Ashburton Loan and Investment Society and the Ashburton Permanent Building and Investment Society to continue to allow the withdrawal by cheque or other order of any money from time to time deposited by any person who, on the first day of August., nineteen hundred and sixty-five, was entitled so to withdraw money. (9) Notwithstanding anything in subsection (4) of section 57 of this Act, it shall be lawful for the Southland Building and Investment Society and Bank of Deposit to accept savings bank deposits at a branch office or agency of the society located at Gore. Cf. Building Societies Act 1962, s. 132 (2) (U.K.)

94 1965, No. 22 Building Societies 269 SCHEDULES FIRST SCHEDULE Section 17 (7) STANDARD RULES FOR MEETINGS Annual General Aleeting and Other Meetings 1. (1) The society shall in the first four months of every financial year hold a meeting as its annual general meeting, in addition to any other meetings held in that year. (2) The society shall describe the annual general meeting as such in the notices calling it. (3) The annual general meeting shall be held at such time and place as the directors shall appoint. (4) The directors may, whenever they think fit, convene a meeting of the society other than the annual general meeting. Right to Requisition a AI eeting 2. (1) The directors shall, on the requisition of a number of members of the society which is not less than one-tenth of the total membership, or, if the society has more than one thousand members, on the requisition of one hundred or more members, forthwith proceed to duly convene a meeting of the society. (2) The requisition must state the objects of the meeting, and must be signed by the requisitionists and deposited at the registered office of the society. The requisition may consist of several documents in like form each signed by one or more requisitionists. (3) If the directors do not within twenty-one days from the date of the deposit of the requisition proceed to duly convene a meeting, the requisitionists, or any proportion of them exceeding half, may themselves convene a meeting; but any meeting so convened shall not be held after the expiry of three months from the said date. ( 4) A meeting convened under this rule by the requisitionists shall be convened in the same manner, as nearly as possible, as that in which meetings are convened by the directors. (5) Any reasonable expenses incurred by the requisitionists by reason of the failure of the directors to duly convene a meeting shall be repaid to the requisitionists by the society, and an amount equivalent to any sum so repaid shall be retained by the society out of any sums owed to or coming from the society to such of the directors as were in default by way of fees or other remuneration in respect of their services. (6) The society or, as the case may require, the requisitionists shall give to the members of the society notice of any resolution that the requisitionists propose to move at the meeting, at the same time and in the same manner as notice is given of the meeting. Form of Notice of Meeting 3. Notice of a meeting of the society shall specify the place, the day, and the hour of meeting and the nature of the business to be transacted at the meeting.

95 270 Building Societies 1965, No. 22 FIRST SCHEDULE-continued Service of Notices of Meetings and Resolutions 4. (1) A notice may be given by the society to any member by sending it by post to him or to his registered address, or (if he has no registered address within New Zealand) to the address, if any, within ~ew Zealand supplied by him to the society for the giving of notice to him. Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, prepaying, and posting a letter containing ~he notice, and to have been effected in the case of a notice of a meetmg at the expiration of twenty-four hours after the letter containing it is posted, and in any other case at the time at which the letter would be delivered in the ordinary course of post. (2) A notice may be given by the society to the joint holders of a share by giving the notice to the joint holder first named in the society's books in respect of the share. (3) A notice may be given by the society to the persons entitled to a share in consequence of the death or bankruptcy of a member by sending it through the post in a prepaid letter addressed to them by name, or by the title of representatives of the deceased, or assignee of the bankrupt, or by any like description, at the address, if any, within New Zealand supplied for the purpose by the persons claiming to be so entitled, or (until such an address has been so supplied) by giving the notice in any manner in which it might have been given if the death or bankruptcy had not occurred. Procedure at Meetings 5. (1) No business shall be transacted at any meeting unless a quorum of members is present at the time when the meeting proceeds to business. Except as otherwise provided herein, five members present in person shall be a quorum. (2) If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall be dissolved. In any other case it shall stand adjourned to the same day in the next week, at the same time and place, or to such other day and at such other time and place as the directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting, the members present shall be a quorum. (3) The chairman, if any, of the board of directors shall preside as chairman at every meeting of the society, or if there is no such chairman, or if he is not present within fifteen minutes after the time appointed for the holding of the meeting, or is unwilling to act, the directors present shall elect one of their number to be chairman of the meeting. (4) If at any meeting no director is willing to act as chairman or if no director is present within fifteen minutes after the time appointed for holding the meeting, the members present shall choose one of their number to be the chairman of the meeting.

96 1965, No. 22 Building Societies 271 FIRST SCHEDULE-continued (5) The chairman may, with the consent of any meeting at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting. (6) At any meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded- (a) By the chairman; or (b) By at least ten members present in person or by proxy. Unless a poll is so demanded a declaration by the chairman that a resolution has on a show of hands been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book containing the minutes of the proceedings of the society, shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution. The demand for a poll may be withdrawn. (7) If a resolution put to the vote of the meeting is a resolution which under the Building Societies Act 1965 will not be effective unless it is passed as a special resolution, a poll shall be deemed to have been demanded by the chairman. 6. (1) Except as provided in the following provisions of this rule, if a poll is duly demanded it shall be taken in such manner as the chairman directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. (2) III the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place, or at which the poll is demanded, shall be entitled to a second or casting vote. (3) A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs, and any business other than that upon which a poll has been demanded may be proceeded with pending the taking of the poll. Votes of Members 7. (1) On a show of hands every member present in person shall have one vote. (2) On a poll on a resolution which under the Building Societies Act 1965 will not be effective unless it is passed as a special resolution, every member shall have one vote.

97 272 Building Societies 1965, No. 22 FIRST SCHEDULE-continued (3) On a poll on any other resolution a member who at the end of the last financial year ending before the date of the meeting held shares in the building society to the value of twenty-five pounds or more shall have such number of votes as is indicated in the following table: Where the Member Holds Shares to the Value of Number of Votes 25 or more but not more than More than 100 but not more than 200 More than 200 but not more than 300 More than 300 but not more than 400 More than 400 One vote. Two votes. Three votes. Four votes. Five votes. For the purpose of this rule any shares which are fully paid up shall be taken at their nominal value and any shares which are partly paid up shall be taken at the amount which has been paid up on them respectively. (4) No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is given or tendered, and every vote not disallowed at such meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the chairman of the meeting, whose decision shall be final and conclusive. (5) On a poll votes may be given either personally or by proxy. 8. (1) The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing, or, if the appointer is a corporation, either under seal or under the hand of an officer or attorney duly authorised. A proxy need not be a member of the society. (2) The instrument appointing a proxy, and the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of that power or authority, shall be deposited at the registered office of the society, or at such other place within New Zealand as is specified for that purpose in the notice convening the meeting, not less than forty-eight hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote, or, in the case of a poll, not less than twenty-four hours before the time appointed for the taking of the poll, and in default the instrument of proxy shall not be treated as valid. (3) An instrument appointing a proxy shall be in the following form or a form as near thereto as circumstances admit:.... Building Society I/We, of of the above-named society,, or failing him, proxy to vote for me/us on society to be held on the adjournment thereof. Signed this day of 19,, being a member/members hereby appoint, of, of,, as my/our my/our behalf at the meeting of the day of 19,and at any

98 1965, No. 22 Building Societies 273 FIRST SCHEDULE-continued (4) Where it is desired to afford members an opportunity of voting for or against a resolution, the instrument appointing a proxy shall be in the following form or a form as near thereto as circumstances admit:... Building Society I/We, of, being a member/members of the above-named society, hereby appoint, of,, or failing him,, of,, as my/our proxy to vote for me/us on my/our behalf at the meeting of the society to be held on the day of,19,and at any adjournment thereof. Signed this day of 19 *in favour of *This form ~s to be used the resolution. against *Vnless otherwise instructed, the proxy will vote Ia5 he thinks fit. *Strike out whichever is not desired. (5) The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll. (6) A vote given in accordance with the- terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or the revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the share in respect of which the proxy is given, provided that no intimation in writing of such death, insanity, revocation, or transfer as aforesaid has been received by the society at its office before the commencement of the meeting or adjourned meeting at which the proxy is used. Joint Shareholders 9. (1) A joint holding of shares in the society shall not give to any of the joint holders, other than the one who is first named in the books of the society, the right to attend a meeting or any right conferred by these rules on a member. (2) Without prejudice to the generality of the foregoing provisions of this rule, any shares which are held jointly shall, for the purpose of determining which members are qualified to vote, whether in person or by proxy, on any resolution, and the number of votes they may give, be regarded as held by the joint holder who is first named in the books of the society. (3) Any reference in these rules to the total membership of the society, or to any number of members of the society, shall be read as if any shares held jointly were held by the joint holder so first named. Corporations Acting by Representatives at Meetings 10. Any corporation which is a member of the society may by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the society or of any class of members of the society, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual member of the society. Cf. Building Societies Act 1962, Ninth Schedule (V.K.)

99 274 Building Societies 1965, No. 22 Sections 29 (1), (4), 70 (3) (a), 71 (5) SECOND SCHEDULE REQUffiEMENTS RELATING TO FOUNDERS' AND DIRECTORS' SHARES 1. In this Schedule- "The relevant period of five years" means- (a) Where the relevant shares are issued in compliance with subsection (1) of section 29 of this Act, the period of five years beginning with the date on which a certificate is issued by the Registrar under that subsection; and (b) Where the relevant shares are issued in compliance with section 70 of this Act, the period of five years beginning with the date of the service on the society of a notice under that section: "The relevant shares" means shares issued by a society in compliance with subsection (1) of section 29 or section 70 of this Act. 2. Neither at the time when the relevant shares are issued, nor at any other time hefore the end of the relevant period of five years, shall the terms regarding the rate of interest, participation in profits, contribution to losses, or rights on a termination or dissolution be, either as a whole or separately, more favourable for those shares than for any other shares in the society. 3. Until the end of the relevant period of five years, the society shall not give effect to or recognise any transfer of the relevant shares by the person to whom they were issued, and the terms attaching to those shares shall so provide: Provided that this clause shall not prevent the society from giving effect to any transmission of those shares by operation of law. 4. Until the end of the relevant period of five years, and so long as the society is not terminated or dissolved, the society shall not repay the sum subscribed foi the relevant shares or any part of that sum, and the tenm attaching to those shares shall so provide. 5. (1) If at any time before the end of the relevant period of five vears there is a failure to comply with clauses 2 to 4 of this Schedule in relation to any of the relevant shares, the Registrar may, subject to the succeeding provisiom of this Schedule, present a petition for the winding up of the society under the Companies Act (2) Not less than one month before presenting a petition for the winding up of the society as aforesaid, the Registrar shall send to the society notice of his decision, and may, if he thinks fit, afford to the society an opportunity of submitting to him, as an alternative to the winding up of the society under the Companies Act 1955, proposals for- (a) Dissolving the society in one of the ways mentioned in sections 114 and 115 of this Act; or (b) Uniting the society under section 32 of this Act with another society, or transferring its engagements to another society under section 33 of this Actand the Registrar may, having regard to the proposals, postpone his decision to present a petition for the winding up of the society.

100 1965, No. 22 Building Societies 275 SECOND SCHEDULE-continued 6. (1) Until the end of the relevant period of five years, the society shall not, without the consent of the Registrar, unite with another society under section 32 of this Act, or transfer its engagements to another society under section 33 of this Act, unless the other society (or, in the case of a union with two or more societies, one of those societies) has been incorporated for more than five years and has assets which exceed one hundred thousand pounds in value. (2) In giving his consent under this clause- (a) To a union, where any of the holders of the relevant shares will become holders of shares in the society formed on the union; or (b) To a transfer of engagements, where any of the holders of the relevant shares will become holders of shares in the society to which the engagements are transferred- ' the Registrar may attach to his consent conditions that are in his opinion equivalent to the conditions that under the foregoing provisions of this Schedule attach to the relevant shares. (3) If at any time during the remainder of the relevant period of five years any conditions attached by virtue of subclause (2) of this clause are broken, the Registrar may present a petition for the winding up under the Companies Act 1955 of the society formed on the union, or of the society to which the engagements are transferred, as the case may be. Cf. Building Societies Act 1962, First Schedule (U.K.) THIRD SCHEDULE Section 30 (3) REQUffiEMENTS RELATING TO ADVERTISING 1. The requirements set out in this Schedule are those that must be fulfilled, in accordance with subsection (3) of section 30 of this Act, where an application is made by a society for permission to commence advertising. Interpretation 2. Iu this Schedule, the expression "the last financial year" means. in relation to any society, the last financial year of the society that ended before the date of thl:' application referred to in clause 1 of this Schl:'dule; and the reference in clause 3 (a) of this Schedule to the last two financial years has a corresponding meaniug..$ pecial Advances 3. The total amount of special advances made by the society must not have exceeded- (a) During the last two financial years, twenty per cent of the total amount of all advances made by the society by way of mortgage on the security of land during those two years; or (b) Where two complete financial years have not elapsed since the incorporation of the society and before the date of the application, ten per cent of the total amount of all advances made by the society by way of mortgage on the security of land during the last financial year.

101 276 Building Societies 1965, No. 22 THIRD SCHEDULE-continued Liquidity 4. (1) At the end of the last financial year the value of the society's liquid funds must have been seven and a half per cent or more of the value of the society's assets. (2) For the purposes of this clause,- (a) "Liquid funds" means the funds of the society (whether represented by investments or on loan to a bank or held in cash) that were not immediately required for its purposes, less any amount due from the society (whether immediately payable or not) otherwise than in respect of shares in or deposits with the society; and (b) The value of such of the society's funds as were represented by investments shall be the value at which they were taken into account in the balance sheet for the last financial year, and not any alternative value shown in that balance sheet. Advances to Officers, or to Companies in Which They are Interested 5. (1) At the end of the last financial year, there must not have been outstanding, in whole or in part, any advance made by the society of which particulars were, in compliance with section 104 of this Act, shown in any annual return sent to the Registrar by the society, or in any auditors' report made to the society. (2) If particulars of any advance were so shown in any such annual return or auditors' report before the date of the application, the application shall be accompanied by a statutory declaration by the manager or secretary of the society stating that the advance has been wholly repaid. Avoidance of Losses 6. The application must contain or be accompanied by a report by the society's auditors, stating that in their opinion the balance of the revenue and appropriation account for the last financial year represents a surplus, after making any adjustments which in their opinion are necessary to provide for diminution in value of assets, or in respect of items of an exceptional or abnormal nature. Interest on Shares 7. The society must not at the date of the application be in arrear with any interest due on shares in the society. Directors 8. The application must be accompanied by a statutory declaration by the manager or secretary of the society, stating that none of its directors held office at the date of the application for a fixed term exceeding five years from appointment, or for a term which was not fixed. 9. Neither any director of the society nor the manager or secretary may, at the date of the application, be a person who has been a director or the manager or secretary of a society at a time when an order has been made against that society under section 64 of this Act, unless the order was made more than five years before the date of the application. Cf. Building Societies Act 1962, Second Schedule (U.K.)